Monday, June 26, 2006

May New Home Sales Down 5.9% YOY

From the U.S. Census Bureau:


NEW RESIDENTIAL SALES IN MAY 2006(PDF)

Sales of new one-family houses in May 2006 were at a seasonally adjusted annual rate of 1,234,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 4.6 percent (±13.1%)* above the revised April rate of 1,180,000, but is 5.9 percent (±10.8%)* below the May 2005 estimate of 1,311,000.

The median sales price of new houses sold in May 2006 was $235,300; the average sales price was $294,300. The seasonally adjusted estimate of new houses for sale at the end of May was 556,000. This represents a supply of 5.5 months at the current sales rate.

May Year-Over-Year Sales
United States -5.9%
Northeast -36.3%
Midwest -20.8%
South 8.4%
West -12.7%

The May median sales price of $235,300 is down approximately 6% from the peak price of $250,800 set in February of this year and is down 4.3% from last month.

Caveat Emptor!
Grim

83 Comments:

Blogger njresident286 said...

Northeast -36.3%

Man that is a HUGE drop. Prices have to be coming down sooner than later

6/26/2006 09:24:00 AM  
Anonymous Anonymous said...

Sticker shock and fewer rational buyers should send home prices faLLING back down to earth.

6/26/2006 09:26:00 AM  
Anonymous Anonymous said...

Martin County to Lennar: Fix the problems, or get out and don't come back
The Palm Beach post is reporting Martin officials rap Lennar over homeowner gripes.

STUART — After weeks of hearing homeowners complain about mold, leaky roofing tiles and shoddy workmanship, Martin County officials have had enough.

The county has told a national home builder to prove its homes meet county standards, fix the problems, or get out and don't come back.

"These horror stories just keep getting worse," said County Commission Chairman Susan Valliere after residents complained Tuesday of problems with homes built by the Miami-based Lennar Corp. "This is really getting upsetting."

Mike Morgan, a Stuart real estate agent, has been complaining to the commission for weeks about faulty electrical wiring, stucco wall and roof problems caused by shoddy building on Lennar's homes in the Martin's Crossing subdivision on Kanner Highway. On Tuesday, Morgan brought the five homeowners to the commission meeting and said he plans to bring 20 to the next meeting to voice their complaints.

"It's been a nightmare," said Rick Scimeca, who said his house has had problems with leaking roof tiles. Scimeca also said his neighbor had a plumbing leak that caused mildew inside her walls. "It's a brand-new house. These things shouldn't happen."

County Building Official Larry Massing met with Lennar officials on Tuesday about the homeowners allegations. Massing said he is requiring the company to inspect the homes with him present and to send him all its reports on roofing tiles, stucco and electrical wiring used in the homes. The county will require Lennar to do more inspections later.

"If I feel Lennar is not doing everything necessary, you'll be the first to know," Massing told the commissioners.

Mark Sustana, general counsel for Lennar, said the company has agreed to have Massing, an inspector hired by Lennar and a private inspector check the electrical wiring on several randomly selected homes at the same time on Friday.

But commissioners were so upset by the homeowner complaints that they suggested going further, such as banning Lennar from building new homes in the county.

"If their workmanship is shoddy, maybe we shouldn't allow them to work here," said Commissioner Michael DiTerlizzi.

Commissioner Sarah Heard also suggested shutting down Lennar's Martin County projects.

"I've heard enough," Heard said. "I think we should suspend operations out there and have them solely focus on bringing houses up to code."

Commissioner Lee Weberman said that if it turns out Lennar's workmanship is poor, he would support revoking its license to do business in the county.

6/26/2006 09:27:00 AM  
Blogger grim said...

Surprised that I haven't seen a "soft landing" press release from the NAR or NAHB yet..

grim

6/26/2006 09:29:00 AM  
Blogger Richard said...

from another article:

"For May, sales were up in all parts of the country except the Northeast, which posed a 7.9 percent decline to an annual rate of 58,000 units."

i believe the number is change from Apr.

6/26/2006 09:32:00 AM  
Anonymous Anonymous said...

United States -5.9%
Northeast -36.3%
Midwest -20.8%
South 8.4%
West -12.7%

I am a little confused about the math. What is the percentage of new home sold in South?
60%?. Otherwise how we come up with -5.9%

6/26/2006 09:32:00 AM  
Blogger grim said...

From Reuters:

U.S. new home sales rise 4.6 percent in May

Sales of new U.S. homes again defied predictions of a slowdown in May and rose 4.6 percent, but median sales prices fell and the U.S. Northeast experienced its slowest sales tempo in nearly two years, according to a government report on Monday.

The pace of new home sales rose to a seasonally adjusted 1.234 million unit annual rate from a downwardly revised 1.180 million unit pace in April, the Commerce Department said.

Economists polled by Reuters were expecting sales of new homes to slow in May to a 1.150 million unit pace from an originally reported 1.198 million unit rate in April. The March sales pace also was revised downward to 1.114 million unit rate from a previously reported 1.142 million pace.

Compared with a year earlier, the May sales pace was down 5.9 percent.

Median selling prices fell 4.3 percent from April to $235,300, a figure that was still 3.1 percent above the year-ago median price of $228,300.

6/26/2006 09:32:00 AM  
Blogger grim said...

I am a little confused about the math. What is the percentage of new home sold in South?
60%?. Otherwise how we come up with -5.9%


More than 50% in May.

Sold During Period
U.S. 1,234
Northeast 58
Midwest 190
South 669
West 317

grim

6/26/2006 09:35:00 AM  
Blogger Richard said...

it's obvious what's going on in our neck of the woods. prices have not fallen enough to increase transaction volumes. question is the swiftness that the blinders fall off the sellers who then accept reality and lower prices to more reasonable levels. i expect a 10-15% haircut between peak prices from last fall/this spring to next spring based upon closed contract sell price. right now my own evidence is showing ~7-8% in the top towns.

6/26/2006 09:35:00 AM  
Blogger Richard said...

month over month saying nothing, particularly looking at may since that would mean people bough 60-90 days before this right in the middle of the spring peak season.

so for the northeast in particular we have a decrease of 36.3% from last year during the peak spring sales season. that means we could see 50-60% declines in july/aug/sept at this rate. youch!

6/26/2006 09:37:00 AM  
Blogger NJGal said...

Blinders aren't off yet - I looked at places on LI yesterday. Real estate agent complaining that it was dead, nothing was selling, no one was calling...I said perhaps they could sell if they lowered prices. No answer to that one. Also told me that nothing would go for asking. I'm still not quite taking the bait.

6/26/2006 09:45:00 AM  
Anonymous UnRealtor said...

Currently, there are 31,486 properties advertised for sale in NJ on our site. For Residential Properties that are Multiple Listed with Garden State, 99% are available to be searched on this site.

http://www.gsmls.com/

6/26/2006 09:51:00 AM  
Blogger RentinginNJ said...

From the WSJ:
New-Home Sales Unexpectedly Rise

By CAMPION WALSH
June 26, 2006 10:37 a.m.

WASHINGTON -- U.S. new-home sales unexpectedly rose in May at their fastest pace since December, as sales climbed sharply in the South and the West.

Sales of single-family homes increased 4.6% last month to a seasonally adjusted annual rate of 1.234 million, the Commerce Department said Monday. Year-to-year, new home sales were still down 5.9% from the pace in May 2005.

Wall Street had expected a drop in sales last month. The median estimate of 11 economists surveyed by Dow Jones Newswires and CNBC was for the May data to show a 4.0% decline from the previous month to a 1.150 million annual rate.

Economists are watching housing data closely to gauge the magnitude of an anticipated slowdown in residential real estate activity following years of torrid market growth that has buoyed consumer sentiment and spending.

The unexpected increase in new home sales could have an effect on monetary policy. The Federal Reserve is widely expected to raise short-term interest rates again when it meets Wednesday and Thursday, extending a two-year credit tightening cycle in an effort to restrain inflation. But the course of the housing market could be a major influence on future decisions.

In the statement accompanying its last rate increase, in May, the Fed's policy-setting Federal Open Market Committee said slower economic growth was likely, "reflecting a gradual cooling of the housing market and the lagged effects of increases in interest rates and energy prices."

While the direction of housing market indicators hasn't been uniform, so far this year's data generally have shown a slowdown. Last week the National Association of Home Builders reported its index for new home sales fell to its lowest level in more than 11 years.

At its meeting this week, the FOMC will have another housing market metric to consider, as the National Association of Realtors is scheduled to report Tuesday on May's existing home resales.

In Monday's report on new home sales, the Commerce Department said May sales climbed 6.0% in the South, reaching their highest point since October. Meanwhile, sales were up 5.3% in the West, reaching their higest point since January, and they were up 2.7% in the Midwest.

But in the Northeast, sales were down 7.9%, hitting the lowest regional level since July 2004.

Home prices fell last month. The average price of a home dropped to $294,300, down from an upwardly revised $302,200 in April. Meanwhile, the median price dropped to $235,500 from an upwardly revised $245,900. Compared with a year earlier, the average price in May was 2.4% higher, and the median price was 2.9% higher.

There were an estimated 556,000 homes for sale at the end of May, down from April's record 560,000. May's inventory represented a 5.5 months' supply at the current sales rate. In April, the inventory represented 5.8 months at the current sales rate.

An estimated 114,000 homes were actually sold last month, up from 105,000 in April, based on figures not seasonally adjusted.

6/26/2006 09:51:00 AM  
Blogger skep-tic said...

unfortunately, sellers aren't reading this report and realtors and the mainstream media are still insisting that the market is "normalizing."

expect inventory to continue to build throughout the summer, with asking prices through the roof. people base their asking prices on what their neighbors are asking. it's a collective state of denial that won't break until it is painfully obvious that no buyers are coming (Aug/Sept)

6/26/2006 09:55:00 AM  
Blogger Richie said...

Martin County to Lennar: Fix the problems, or get out and don't come back
The Palm Beach post is reporting Martin officials rap Lennar over homeowner gripes.

STUART — After weeks of hearing homeowners complain about mold, leaky roofing tiles and shoddy workmanship, Martin County officials have had enough.


This doesn't surprise me. One of my clients owns a property management company, they manage properties of 300+ units (condos, townhomes, HOA's, etc).

He will not touch any property that has not been in existance for 7 years. He said the first 7 years are nothing but complaints and problems with cheap/shoddy construction.

-Richie

6/26/2006 09:59:00 AM  
Blogger grim said...

The big question is, will data such as this cause the Fed to go too far?

grim

6/26/2006 10:00:00 AM  
Blogger patient homebuyer said...

my wife and i want to buy a home
but i refuse to be a bagholder, i am waiting until the spring 07
for these numbers to really shape the market. still to many sellers in denial. grim thank's for all the information keep up the good work

6/26/2006 10:18:00 AM  
Blogger skep-tic said...

the longer sellers wait to cut prices, the more it will cost them. eat those $30k property taxes for a while as inventory continues to build

6/26/2006 10:21:00 AM  
Blogger RentinginNJ said...

While new home sales jumped from the previous month, prices continued to come down. Month-month median prices dropped by over 4%. At the existing rate, we should see YOY price declines by July or August.

The builders are lowering prices and undercutting private sellers who refuse to budge on their price. It’s even more pronounced than this data suggests because the builders are throwing all kinds of incentives at buyers.

Any bets on existing home sales? I’m guessing they come in below expectations.

6/26/2006 10:29:00 AM  
Anonymous Anonymous said...

Hopefully the Fed WILL go "too far" (half point increase), and burst this crazy bubble.

6/26/2006 10:36:00 AM  
Blogger minutesfromNYC said...

Greedy Flipper in trouble:

Bought house for 435K

Tore down and built cookie cutter center hall colonial McMansion

Selling for 1.9 mil

been on the market close to 280 days now. Realtor describes as VERY MOTIVATED SELLER

Greed = nono

6/26/2006 11:03:00 AM  
Blogger chicagofinance said...

grim said...
The big question is, will data such as this cause the Fed to go too far?
grim
6/26/2006 11:00:04 AM

Yes. Inflation in the system is considered by the Fed as the prime toxin for the economy, so everything else be damned.

It comes comes down to a definition of "too far". Too far for everyone's tastes - yes. As a policy decision, prudent and shrewd.

chicago

6/26/2006 11:15:00 AM  
Blogger skep-tic said...

buyers are seeing through the games. I have a friend that was recently looking for a place and finally found one that seemed to be appropriately priced. But his realtor told him he had to bid over list if he wanted it. he passed and guess what? the house is still on the market

6/26/2006 11:16:00 AM  
Anonymous UnRealtor said...

Minutes, I often see $2M houses next to $400K houses.

Not.

What was that flipper thinking? (Or, more accurately, was that flipper thinking?)

6/26/2006 11:26:00 AM  
Anonymous Anonymous said...

Foreclosures Jump

In another nightmare of sorts, the Associated Press is reporting Foreclosures May Jump As ARMs Reset.

As more hybrid adjustable rate mortgages adjust upward and housing prices dip, many Americans can't refinance out of this squeeze. They are finding themselves trapped in too-high monthly payments, and some face foreclosures.

In the last several years, millions of Americans took equity out of their houses and refinanced when interest rates were at historical lows and housing prices were at record highs.

Many of them chose to refinance into hybrid ARMs that lenders were aggressively pushing. ARMs, which featured a low introductory interest rate that resets upward after a set period of time, were easier to qualify for than traditional fixed-rate loans.

ARMs are now starting to fall by the wayside as the difference in interest rates narrows. The average rate on a 30-year fixed rate loan in May was 6.60 percent compared to 5.63 percent on a one-year ARM, according to Freddie Mac. In 2003, rates on a 30-year fixed were at 6.54 percent, while ARMs carried a 3.76 percent rate.

This year, more than $300 billion worth of hybrid ARMs will readjust for the first time. That number will jump to approximately $1 trillion in 2007, according to the MBA. Monthly payments will leap too, many beyond what homeowners can afford.

"ARMs are a ticking time bomb," said Brad Geisen, president and chief executive of property tracker Foreclosure.com. "Through 2006 and 2007, I'm pretty sure we'll see a high volume of foreclosures."

Last year, foreclosures hit a historical low nationwide at about 50,000. But that number has more than doubled since then, according to Foreclosure.com.

And delinquency rates appear to be rising, as well. While delinquency rates fell for most types of loans from the fourth quarter of 2005 because of a stronger economy, delinquencies for both prime and subprime ARM loans increased year-over-year in the first quarter, according to the MBA.

6/26/2006 11:28:00 AM  
Anonymous Anonymous said...

"ARMs are a ticking time bomb," said Brad Geisen, president and chief executive of property tracker Foreclosure.com. "Through 2006 and 2007, I'm pretty sure we'll see a high volume of foreclosures."

Bababababababa

BOOOOOOOOOOOOOYcott Houses!

Bob

6/26/2006 11:29:00 AM  
Anonymous Anonymous said...

555,000 New Homes For Sale In May, 2006

The median sales price of new houses sold in May 2006 was $235,300. The seasonally adjusted estimate of new houses for sale at the end of May was 556,000.”

The $235,300 median is down from the high in February 2006 of $250,800. The inventory looks like another record:

448,000 May 2005

458,000 June

459,000 July

477,000 Aug.

491,000 Sept.

492,000 Oct.

508,000 Nov.

515,000 Dec.

525,000 Jan. 2006

533,000 Feb.

547,000 Mar.

553,000 April

555,000 May

“The median price of homes sold did decline to $235,300, a drop of 4.3 percent from the April sales price. Economists believe that the huge backlog of unsold homes will put further downward pressure on prices in coming months.”



PAPAPAPAPPA

PANIC!

Bob

6/26/2006 11:36:00 AM  
Blogger grim said...

Just keep one thing in mind.

These numbers represent contracts, not closed sales.

Thus, these numbers don't take into account cancellation rates, which have been pushing higher lately..

grim

6/26/2006 11:38:00 AM  
Blogger minutesfromNYC said...

buyers are seeing through the games. I have a friend that was recently looking for a place and finally found one that seemed to be appropriately priced. But his realtor told him he had to bid over list if he wanted it. he passed and guess what? the house is still on the market

I still see a few houses which were sold this month with a higher sold price than asking price.

Another trend I am beginning to notice is houses which are on the market for, say, 30 days are experiencing PRICE INCREASES???!!

I dont understand why though?

6/26/2006 11:43:00 AM  
Anonymous Anonymous said...

Freddie Mac reported: One-Year ARM At Highest Level In Almost Five Years
Freddie Mac [reported] the 30-year fixed-rate mortgage averaged 6.71 percent ... The 30-year FRM has not been higher since May 31, 2002, when it averaged 6.76 percent.
...
One-year Treasury-indexed ARMs averaged 5.75 percent this week ... The 1-year ARM has not been higher since August 3, 2001, when it averaged 5.77 percent.

6/26/2006 11:43:00 AM  
Anonymous Anonymous said...

the video of Volcker's speech of February 2005 at the Stanford Institute for Economic Policy Research

6/26/2006 11:43:00 AM  
Anonymous Anonymous said...

http://calculatedrisk.blogspot.com/2006/06/popular-internet-properties.html

6/26/2006 11:46:00 AM  
Anonymous Anonymous said...

Could the jump be because newer homes are being priced lower than older homes?

In the link provided average home prices have gone down by 3% from April.

Median price April :245,000
Median price May : 235,000

Average price April :302,000
Average price May :294,000

I bet existing home sales across the country will look a lot worse.
When is the existing home sales report coming out?

VB

6/26/2006 12:09:00 PM  
Blogger grim said...

EHS for May will be released tomorrow at 10:00am.

6/26/2006 12:19:00 PM  
Blogger lindsey said...

As grim noted, contracts, not sales. For months the builders have been talking about rising cancellations. I don't know if Census/HUD do anything to calculate for cancels, but whatever they do certainly doesn't capture them.

I think the revision downward is going to be big in July when the June number comes. Since I'm predicting I may as well go on the record with a guess for tomorrow -- existing home sales drop more than expected.

I don't know what is being predicted by analysts, but I'm going with what I think would be a bearish drop (by the industry's standards) of 7 percent y-o-y. That would put May at a 6.64M annual rate, 1.9 percent behind April's reported 6.76M.

Maybe we could have a prediction thread Grim?

6/26/2006 12:19:00 PM  
Anonymous Anonymous said...

minutesfromnyc:

I've been seeing price increases as well. I think it can be attributed to the fact that because so many buyers are offering under asking price, sellers have resorted to raising their price so that the lowball offer is comparable to the price they initially wanted. And while anyone with access to the MLS will see through this little game---most people don't, and I doubt their realtor will tell them---after all, the buyer's agent makes more money when the buyer makes a higher offer.

6/26/2006 12:23:00 PM  
Blogger grim said...

Lindsey,

I started a new thread on the message board for MAY EHS predictions:

May Existing Home Sales Predictions

grim

6/26/2006 12:26:00 PM  
Blogger grim said...

From the Boston/New England area:

Economic Growth Continues

Here in much of New England, we bid up real estate while our competitors build-up real estate," said Frederick Breimyer, Boston area economist for the Federal Deposit Insurance Corporation and the president of NEEP.

"High housing costs work against future economic growth, largely because young families either cannot or choose not to pay for the cost of homeownership," said Breimyer.

"This is the group we should be most concerned about, for they either will be our future or the future for someplace else. Every community, every town, every city, every society needs to provide for its own future, and that means making adequate provision for young adults and young families. They require adequate housing, good education, and opportunities to find and hold good jobs. Each of these three basic requirements represents a separate, distinctive challenge for this region."

6/26/2006 12:36:00 PM  
Blogger grim said...

10Y touching 5.245%, not too far away from 5.25%.

jb

6/26/2006 12:46:00 PM  
Anonymous Anonymous said...

Hopefully the Fed WILL go "too far" (half point increase), and burst this crazy bubble.

Can you believe too far is still only @ 7% interest!?...Let them raise the rates.

We too are waiting for prices to become more realistic. We took ourselves out of the market this summer.

6/26/2006 12:49:00 PM  
Blogger grim said...

How can you give the Fed so much credit?

While the massive credit expansion was one of the factors that led to the development of the bubble. The bubble itself is, most certainly, not their bubble to pop..

grim

6/26/2006 12:56:00 PM  
Anonymous Anonymous said...

"Yes. Inflation in the system is considered by the Fed as the prime toxin for the economy, so everything else be damned."

Sure - but the funny this is that interest rates are a symptom of inflation, not a cause. The only real cause of inflation is increasing the money supply faster than GDP is expanding. It truly is that simple.

6/26/2006 12:57:00 PM  
Blogger chicagofinance said...

I appreciate your point on stimulus, but I think the concern is the collective decisions made by all actors in the economy, and the tremendous lag there is in the tools available for use.

The other interesting point is that most talking heads are purposely alarmists that squawk about "overshooting" because it is convenient and popular to do so.

Well how about "undershooting"?

6/26/2006 01:11:00 PM  
Blogger chicagofinance said...

This comment has been removed by a blog administrator.

6/26/2006 01:14:00 PM  
Blogger grim said...

While the NHS numbers were surprising, here is the daily jaw dropper:

US Treasury's Henry-Fannie, Freddie pose risks

U.S. mortgage finance giants Fannie Mae and Freddie Mac pose risks to financial systems that could hit primary dealers, tighten credit and reduce liquidity in markets, a Treasury Department official said on Monday.

"We at the Treasury are confident we are not simply 'crying wolf,'" Emil Henry, assistant treasury secretary for financial institutions, said in remarks prepared for delivery to a financial services industry group.

Henry said the potential for spillover into financial markets from any crisis at one of the government-sponsored mortgage finance enterprises (GSEs) is "nothing short of breathtaking."

His comments came as the administration pushes for legislation that would tighten government oversight of the GSEs after multibillion-dollar accounting disasters at both companies. The Treasury Department has said that anything short of a regulator directed by Congress to cut GSE mortgage portfolio size is unacceptable, but some lawmakers disagree.

Henry said risks from GSEs could conceivably match the scale of the 1998 meltdown of the Long Term Capital Management hedge fund.

A deterioration in GSE financial conditions would almost certainly increase risk premiums and boost yields on GSE debt and mortgage-backed securities relative to Treasury yields and other benchmarks, he said.

Primary dealers holding large positions in GSE debt or mortgage-backed securities could incur substantial losses, which would spill over into other markets, he said.

6/26/2006 01:18:00 PM  
Anonymous bubbled-out said...

Another trend I am beginning to notice is houses which are on the market for, say, 30 days are experiencing PRICE INCREASES???!!

I dont understand why though?


It's a marketing technique to get fence sitters motivated. They figure that people who have their eye on the house might make a move if they feel an urgency because the price is going up. Same psychology as when interest rates start to move up, creating urgency to buy before it goes up even more.

6/26/2006 02:22:00 PM  
Blogger skep-tic said...

these sorts of games ultimately backfire, I think. If people were disinclined to look/bid at houses before due to high prices, then further raising prices will just drive more potential buyers away.

Sellers/realtors are looking for every solution but the obvious one: lower prices. There would be no inventory glut if prices were fair

6/26/2006 02:42:00 PM  
Anonymous Anonymous said...

No, Skep-tic, there is an inventory glut because of "obstinate fencesitters" like me who are not being honest and forthcoming with our bids.

That's what I've heard.

"The buyer's a liar." If you (the seller) just wait them out, they'll come with the bid.

Pat

6/26/2006 02:52:00 PM  
Blogger grim said...

Market Alert Market Alert:

Summer vacations and other disctractions cause home prices to drop.

RealtyTimes Market Report:

Summer arrived this past week on June 21st. Interest rates continue to inch their way but haven't quite hit the 7% mark which is still very low! Buyers may have a bit more to chose from now that families are winding down the school year and planning Vacations. This distraction is causing a slight downward trend for home prices. Sellers should plan to make their homes stand out by sprucing up. Clean and uncluttered is the best way to show off the space your home has to offer. A fresh coat of paint really goes a long way.

grim

6/26/2006 02:54:00 PM  
Blogger grim said...

Nothing like a fresh coat of paint to get the market movin' again...

6/26/2006 02:58:00 PM  
Blogger skep-tic said...

so this is why they earn 6%:

clean up and paint.

6/26/2006 03:01:00 PM  
Anonymous Anonymous said...

Did you see the market report on realtor.com from the broker in Bergen county?

It's a hoot, although a little dated.

6/26/2006 03:01:00 PM  
Anonymous Anonymous said...

saw some comments yesterday on arm resets, anyone have any thoughts on its effect on NJ market, market stats on people using arms in NJ?

6/26/2006 03:20:00 PM  
Blogger RentinginNJ said...

Another trend I am beginning to notice is houses which are on the market for, say, 30 days are experiencing PRICE INCREASES???!!

I dont understand why though?


Another reason is that buyers tend to shop within price brackets. By bumping up the price, the home now moves onto the radar screen of shoppers in a new price bracket. For example, you home gets no takers at $495k, so you bump it up to $500k. All of the sudden, buyers looking for houses in the $500 - $525 range see your house….or so the theory goes.

6/26/2006 03:27:00 PM  
Blogger Richard said...

seriously folks, in a stalemate does anyone really think the seller with ridiculous asking prices will wait out the buyers? it's so easy to get turned off when wanting to buy something at today's prices. the I HAVE TO GET IN NOW BEFORE PRICES GO UP!!! mentality is dead dead dead except for the few stragglers who are uninformed or very late to the party.

6/26/2006 03:36:00 PM  
Anonymous dl said...

"High housing costs work against future economic growth, largely because young families either cannot or choose not to pay for the cost of homeownership," said Breimyer.

"This is the group we should be most concerned about, for they either will be our future or the future for someplace else. Every community, every town, every city, every society needs to provide for its own future, and that means making adequate provision for young adults and young families."


New Jersey should sit up and take notice and remember that while "Adult" communities might not increase school rolls, they don't provide for a very profitable future either.

6/26/2006 03:51:00 PM  
Blogger chicagofinance said...

Think about this issue on a relative basis. NJ is in trouble when times are good. We are sliding backwards, while other states are investing in the future. Think GM versus Toyota.

OPINION from the laughably right leaning WSJ editorial pages.

=================
REVIEW & OUTLOOK

States of Plenty
June 26, 2006; Page A14

America's governors must feel as if they've won their own state lotteries. Thanks to the snappy growth of the U.S. economy over the last three years, state treasuries are now overflowing with tax collections.

At least 40 states are in the black, and only a handful, such as the Gulf states wrecked by Hurricane Katrina and perpetually hapless New Jersey, are still spilling red ink. In 2005 state and local revenues grew by 10.5%, according to Census Bureau data, and so far this year tax receipts in most states are climbing at close to that level. California's income tax revenues in April were up an astonishing 55% from last year. Oklahoma is so flush it has exceeded its legal limit on its rainy day fund.

This is all in contrast with 2002-03 when states were scrambling to pay for the many new spending commitments they'd made in the 1990s. Consider the amazing turnaround of California and New York City. Four years ago both were teetering on insolvency, but now Governor Arnold Schwarzenegger and Mayor Michael Bloomberg are boasting multi-billion dollar surpluses. They prove that among the biggest beneficiaries of President Bush's 2003 tax cuts have been state and local governments, even though tax cut opponents predicted states would be losers.

By our calculations, based on revenue estimates from around the country, states and cities will collect $50 to $100 billion in unexpected revenues this year (see chart). That's the good news. The bad news is that most Governors and state lawmakers are spending this money so recklessly that they're making Republicans in Congress look like penny pinchers.

State spending is expected to increase by double digit rates this year, and in many state capitals, such as Albany, this will be the fastest rate of spending growth since the 1970s. Fortunately, some states are investing surpluses in pro-growth tax cuts to boost their economy's competitiveness.

[edited]

6/26/2006 04:05:00 PM  
Anonymous Anonymous said...

nice article on money.cnn.com

The only reason you would think they were up [is] the aggressiveness of the builders' sales techniques," he said. "They're using Realtors more, they're using incentives more. In our January survey, 18 percent said they were doing some level of price cutting. In June, that was up to 41 percent. A year ago they had to do hardly anything to sell. They just had to whisper in the woods that they had a house and the buyers would come running."


link

6/26/2006 04:08:00 PM  
Anonymous UnRealtor said...

Lots of sellers giving up / forced to face reality:


MLS 2273504
$850K junk cape cod on busy street
WITHDRAWN after 60 days
http://www.realtor.com/Prop/1059294769


MLS 2275762
$840K junk ranch
WITHDRAWN after 60 days
http://www.realtor.com/Prop/1059682078


MLS 2273624
$940K => $915K colonial on busy street
WITHDRAWN after 70 days
http://www.realtor.com/Prop/1059294679


MLS 2239439
$699K => $659K junk cape cod
EXPIRED after 5 months
http://www.realtor.com/Prop/1055161849


Also a bunch of others in the past few weeks.

(These realtor.com links will soon no longer work.)

6/26/2006 04:14:00 PM  
Anonymous Anonymous said...

gsmls count - 31,510

does anyone know what the inventory level was during 1989-93?

6/26/2006 04:14:00 PM  
Anonymous UnRealtor said...

"OPINION from the laughably right leaning WSJ editorial pages."


Makes for a nice juxtaposition with the laughably left leaning NY Times. :)

6/26/2006 04:16:00 PM  
Anonymous Anonymous said...

Unrealtor - You're kidding right? The NYT is a shill for the Republicans.

6/26/2006 04:34:00 PM  
Blogger chicagofinance said...

Makes for a nice juxtaposition with the laughably left leaning NY Times. :)
6/26/2006 05:16:20 PM

Ultimately, I don't really care that much about these types of issues. However, I really get fatigued by the NY Times' taking reality, and reconstituting through the view of an affluent individual who either inherited or married into their wealth, and walks through life with a repressed feeling of guilt that colors everything they think and say.

6/26/2006 04:35:00 PM  
Blogger Mr. Oliver said...

Anonymous 5:34

Have you ever read the paper? I love the Times, but the last thing I would think to describe it as is a "shill for the gop."

6/26/2006 04:51:00 PM  
Blogger RentinginNJ said...

seriously folks, in a stalemate does anyone really think the seller with ridiculous asking prices will wait out the buyers? it's so easy to get turned off when wanting to buy something at today's prices. the I HAVE TO GET IN NOW BEFORE PRICES GO UP!!! mentality is dead dead dead except for the few stragglers who are uninformed or very late to the party.

What is supposed to happen? All 31,542 people trying to sell a home in the Northern half of NJ are going to collude not to lower prices? The “must get in now or be priced out forever” mentality will soon become “If I don’t sell now, I might never get another chance”. It just takes time.

6/26/2006 05:03:00 PM  
Anonymous Anonymous said...

I don't think prices will fall until there is a credit squeeze. We still read reports about ARM loans constituting 30% of total mortgage applications. The credit squeeze will not happen until we see default on loan payment. The default on loan payment won't happen until about 6months to 1 year from when majority of the ARM loans reset. In my opinion 2008 spring is when things might start looking good for a buy.

6/26/2006 05:21:00 PM  
Anonymous Anonymous said...

unrealtor,

MLS 2239439
$699K => $659K junk cape cod
EXPIRED after 5 months
http://www.realtor.com/Prop/1055161849


I actually try to lowball this one at $570k which I think is a very fair price under the current market, but the seller denied the reality.

6/26/2006 05:53:00 PM  
Anonymous UnRealtor said...

"Unrealtor - You're kidding right? The NYT is a shill for the Republicans."


I hope you're joking. They just disclosed national security secrets twice in the past few days for no other purpose than to hurt their boogeyman GWB.

I think there may be prosecutions this time, though, they've gone too far one too many times with their publication of classified national security secrets.

6/26/2006 06:40:00 PM  
Anonymous UnRealtor said...

"Ultimately, I don't really care that much about these types of issues. However, I really get fatigued by the NY Times' taking reality, and reconstituting through the view of an affluent individual who either inherited or married into their wealth, and walks through life with a repressed feeling of guilt that colors everything they think and say."


Well put. There's a term for such self-loathing, but this is not a politics board.

6/26/2006 06:42:00 PM  
Anonymous UnRealtor said...

"I actually try to lowball this one at $570k which I think is a very fair price under the current market, but the seller denied the reality."


They'll regret not taking your offer.

The comps on that street are historically very low, a couple from domania.com:

10 Mount Ararat Rd Aug 2004 $495,000
19 Mount Ararat Rd Aug 2004 $375,000
15 Mount Ararat Rd Dec 2003 $415,000
10 Mount Ararat Rd Nov 2003 $445,000

6/26/2006 06:45:00 PM  
Anonymous Anonymous said...

Unrealtor sais: I think there may be prosecutions this time, though, they've gone too far one too many times with their publication of classified national security secrets.

But I guess it was OK for the White House to give away the undercover identity of a CIA agent. We lost all sense of democracy in January 2001. Thanks God for the NY Times and anyone else who exposes this administration for the crooks and slime that they are.

6/26/2006 06:58:00 PM  
Anonymous Anonymous said...

All politicians are crooks.

Can anyone tell me what the housing inventory was during 1989-1991?

GSMLS - 31564. For some reason GSMLS seems to be growing at about 70 a day for sometime now. How easy is it to fudge GSMLS numbers?

6/26/2006 07:10:00 PM  
Anonymous Anonymous said...

I thought about housing inventory in 89-90 and asked here last week.... nothing came back. But when I think about interest rates dropping then, I'm not sure the inventory pattern will follow now. Plus homes then didn't function as Mac machines.

6/26/2006 08:12:00 PM  
Anonymous UnRealtor said...

Treasury Secretary Snow's letter to the traitors at the NY Times:

http://tinyurl.com/mdg2s

And "Anon" who writes: "We lost all sense of democracy in January 2001."

Please get a grip.

I'd suggest the exercise of some critical thinking skills (if available), as there was no "covert agent leak," as anyone who actually read the fabled Novak article would know:

http://tinyurl.com/b4wrn

I will not post further on these topics in this thread.

6/26/2006 08:27:00 PM  
Blogger chicagofinance said...

I think this one is just juicy considering its implications:

Property Address
67 Jefferson St
Hoboken, NJ 07030

Market Value*
$785,166

Default Amt
$500,000

6/26/2006 08:28:00 PM  
Anonymous UnRealtor said...

RE: Housing inventory in 1989

Have you looked at Grim's article:

http://www.youdovoodoo.com/80sbubble.htm

The link to it is always on the right sidebar.

6/26/2006 08:29:00 PM  
Blogger chicagofinance said...

I just read this quote.

excellent

========================
"Advertisements contain the only truths to be relied on in a newspaper." -- Thomas Jefferson

6/26/2006 09:08:00 PM  
Anonymous Anonymous said...

Unrealtor said: I will not post further on these topics in this thread.

"So there!" LOL. You get a grip. Republicans! HAH!

6/26/2006 09:15:00 PM  
Anonymous UnRealtor said...

"So there!" LOL. You get a grip. Republicans! HAH!


Substance-free, as expected (mixed with a bit of tourettes)

Try picking a handle, by the way.

6/26/2006 09:22:00 PM  
Blogger minutesfromNYC said...

"So there!" LOL. You get a grip. Republicans! HAH!

How about thinking for yourself instead of affiliating with party lines

Oh, and the NY Times is sooooo objective

6/27/2006 07:04:00 AM  
Blogger skep-tic said...

let's not let this site derail into a political battle. there's enough to argue about just sticking to real estate

6/27/2006 08:47:00 AM  
Blogger BergenBuyer said...

I agree with another poster in that developers are using realtors and offering incentives to sell homes today. They're smarter than the avg seller and have more data that shows the market is in the crapper. They know it's either sell now at little or no profit or it will be a loss and longer periods of carrying costs.

I think that is why May's #'s beat downwardly revised forecasts. I don't have official #'s, but there seems to be a higher % of new homes for sale in the south vs. existing homes compared to the Northeast (all those communities that are attracting baby boomers).

The developers are trying to beat the collapse and people are biting. Normal sellers haven't realized what's happening yet and are barely budging on price.

Another thing is that retirees have a different mindset, they sold their house in NJ for 20 times what they paid for it in 1970, they're buying in FL or SC because they want the lifestyle, they'd rather pay a little more today to enjoy a year of their life rather than rent an apt while they wait for the market to collapse.

Just my thoughts.

6/27/2006 09:03:00 AM  
Anonymous Anonymous said...

"But I guess it was OK for the White House to give away the undercover identity of a CIA agent."

1: She was not an undercover officer.
2: Wilson was lying publicly about his trip and who arranged it.
3: White House was not the leaker. It was (according to most experts) Armitage who is anti-war state dept official.

The only purpose of his actions was to hurt Bush admin. He didn't do any work in Nigeria. It is still open issue (the conclusion made by european agencies and 9/11 commission was that the former head of Iraqi nuclear program met with Nigerian officials - we don't what they talked about)/

6/27/2006 11:41:00 AM  

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