Thursday, July 20, 2006

Inventory Rising Across The U.S.

From the Wall Street Journal:

For-Sale Signs Multiply Across U.S.

The housing market continues to weaken in much of the country as inventories of unsold homes rise and many sellers cut their asking prices, a quarterly survey by The Wall Street Journal shows.

There is no sign of a broad collapse of housing prices about a year after the once-hot coastal markets entered a long-anticipated cooling phase. But the general level of prices is edging down in some areas and leveling off in others, while the supply of homes for sale keeps rising.

The number of homes on the market in Orlando, Fla., for example, is nearly five times the year-earlier level, while the inventory has quadrupled in Phoenix and Tampa, Fla., and nearly tripled in the Washington, D.C., area.
...
To examine the residential real-estate prospects for 26 major metro areas, The Wall Street Journal gathered data on inventories of homes for sale at the end of the second quarter from a variety of local sources; pricing trends based on surveys of real-estate agents by Daniel Oppenheim, an analyst at Banc of America Securities in New York, a unit of Bank of America Corp.; and projections of job creation by Moody's Economy.com, a research firm in West Chester, Pa. Employment trends are among the most important factors in determining demand for housing.

Metro areas showing large increases of homes for sale and relatively weak employment growth include Boston, Los Angeles, Philadelphia and New York. Among the strongest markets overall are Houston, Dallas-Fort Worth and Seattle. All three areas are benefiting from robust job markets, and modest home prices are drawing investors and new residents to Texas.

43 Comments:

Anonymous Anonymous said...

I ave $300,000 in cash to invest due to my inteligence with life and money. What do you all think would be a good place to keep my $300,000 in cash? I do not think that putting my 300k in cash towards a 700k townhouse near Manhattan would be the wisest use since I could most likely rent for less. Oh the perils of having 300k in cash and being 28! :(

- phd.

7/20/2006 10:31:00 AM  
Anonymous Anonymous said...

Well, with all your intelligence, shouldn't you be able to figure it out with your life and money experience?

;-P

7/20/2006 10:32:00 AM  
Anonymous Anonymous said...

No :(

I need to brag about my accomplishments to fill the hole which is my life

- phd.

7/20/2006 10:34:00 AM  
Blogger grim said...

"This is like deja vu all over again"

7/20/2006 10:39:00 AM  
Blogger Flop that house said...

anon 11:31 and 11:34

shame on you using other people's login name.

register and don't be an Anonymous

7/20/2006 10:40:00 AM  
Blogger Flop that house said...

I am not here to brag about my accomplishment. I am proud of of my degree and I am just slow to the financial world and I need to catch up.
This is a great place to learn about RE and other investment tools. (Thanks grim for the blog)

if in any way my degree (or my login) offended you, go and get one yourself!

7/20/2006 10:44:00 AM  
Blogger grim said...

Fed Chief: Housing Market May Land Safely

WASHINGTON (AP) -- Federal Reserve Chairman Ben Bernanke told Congress Thursday that the once high-flying housing market appears to be staging a safe landing.

"The downturn in the housing market so far appears to be orderly," he said during a hearing before the House Financial Services Committee.


So far, Bennie, so far.

grim

7/20/2006 10:44:00 AM  
Anonymous Anonymous said...

phd

Debloat that head of yours boy!

I not impressed!

So what are you going to do with $300k smart guy (phd)?

Bababababa

Bob

7/20/2006 10:46:00 AM  
Blogger Flop that house said...

$300K in cash is just a hypothetical question. I barely have enough for 20% down for a $400K townhouse (student loan is killing me)

I asked about the $300K question is because my co-worker is retiring and would be selling of this house and think he will get about $300K in equity (the house is paid off already). just wondering where to put the money insteado of saving account in the bank.

7/20/2006 11:01:00 AM  
Anonymous Anonymous said...

I went through the motions and rec'd a BS in engineering. Alot of neet stuff and alot of it useless. The MS program looked pretty agrivating but at least you could focus on one area. I would imagine the PHD would be much the same. Anyway great accomplishment. Don't let anyone rip you for being proud.

However if youi go around calling yourself doctor that is another story!

7/20/2006 11:03:00 AM  
Blogger Metroplexual said...

PhDs were the first doctors. Physicians adopted the term in the 19th century to gain some semblance of respect, think leeches and blood letting. (barbers used to do the work of physicians)

7/20/2006 11:10:00 AM  
Blogger Metroplexual said...

Phoenix fascinates me. A nearly 50% rise in prices in one year 2004-2005 mostly due to California speculators. Now over 50,000 in inventory. It is alot of inventory for the population. I think it is where the firesale begins.

7/20/2006 11:14:00 AM  
Blogger Metroplexual said...

Calculated risk has an interesting discussion from the Anderson School's Chris Thornburg and his take on bubble unwinding declines in price.

There is a chart showing LA's price declines.

7/20/2006 11:21:00 AM  
Blogger Flop that house said...

It's not exactly rocket science that I studied for a Ph.D.

It's just a login name. I am just mad at people, writing post using my login name.

I did not brag at all. I am being very humble because I know I did not bring a lot to the table in terms of RE and finanical discussions. I hope to learn because information is power and the more you know, the better decision you will make.

I despise the coward who posts as other people's login. If you have something to say, don't be a coward, login and discuss.

-sorry for the tirade

7/20/2006 11:22:00 AM  
Anonymous UnRealtor said...

The chart lists the job market in New York as "Weak," with manu Southern cities as "Strong" or "Very Strong."

7/20/2006 11:31:00 AM  
Blogger Shailesh Gala said...

Was listening to BB's testimoney today morning. On question regarding ARM loans, he said, about 20% of all outstanding loans are ARM, and 50% of them will be revised this year. He also added, so far he has not seen anything that will cause of concern though.

7/20/2006 11:34:00 AM  
Anonymous LeeS said...

http://biz.yahoo.com/ap/060720/bernanke.html?.v=11
AP
Fed Chief: Housing Slowdown 'Orderly'
Thursday July 20, 12:01 pm ET
By Jeannine Aversa, AP Economics Writer

Fed Chief Bernanke Says Housing Slowdown Appears 'Orderly'


WASHINGTON (AP) -- Federal Reserve Chairman Ben Bernanke told Congress Thursday that the once high-flying housing market appears to be staging a safe landing.
"The downturn in the housing market so far appears to be orderly," he said during a hearing before the House Financial Services Committee.

After five straight years of booming activity, the housing market is slowing as mortgage rates rise and still-high home prices make it difficult for some people to buy.

One of the things that Bernanke and his Fed colleagues are keeping close tabs on is the extent to which a housing slowdown will put a damper on overall economic activity.

"We recognize the risk ... and we are watching it very carefully," he said. Bernanke's appearance was the second in as many days as he gives Congress a semiannual review of the economy. On Wednesday, Bernanke told senators he believes the slowing economy will help keep inflation in check.

7/20/2006 11:40:00 AM  
Blogger delford said...

Yes as I have been saying its different this time, it certainly is, its scarier.

A couple of little tid bits here. A guy I know who has been looking in a nice area of LI, told me the following.

A house he and his wife looked at last Sept at 759K got into a bidding war, and sold at 772.

His realtor called yesterday to tell him that the house next door just came on the market and the asking price is 679K

This is the exact same house, as all the houses in this development are the same, built around 25 years ago. He sent me the listing information on both properties, including the sold price on the one from last year, pictures and all.
The realtor told him that the seller is motivated, and he should be glad he did not purchase last year. Tha is over a 90K difference in sold price to today's asking price, not to mention what the final sales price might be on this new listing.

In my own world, people who used to confront me about my housing market views around town, are now avoiding me, must be the huge inventory with no sales, as we approach late July.

I am being nice.... for now.

7/20/2006 12:07:00 PM  
Blogger Richard said...

give it time folks. last spring only the cat's head was out of the bag. next spring the entire cat will be out. i've heard a few stories from this past spring to present of pending sales falling through because the would be buyers had a contingent on selling another home and couldn't find a greater fool. there are also those who bought another house without selling their existing one first and a number of them are sitting vacant on the market right now. believe me i've seen a number of them recently.

you can bet you're going to see alot more of this through the winter and into next spring market. remember it's a big ponzi scheme folks. if you don't get people buying in at the bottom the people above that can't move up. i think spring '07 is going to be ugly followed by spring '08 which will be even uglier. if you can be patient and wait another 9-12 months you will be rewarded.

7/20/2006 12:15:00 PM  
Blogger Richard said...

delford, i have 2 similar stories. in a condo complex near me the top bubble price condo went for $450k. right now there are 4 identical units on the market with 3 priced in the $419k-$422k and one at $409k. they're all pretty much the same and they're all sitting for weeks now. that means our $450k friend is at least $30k in the hole in only 9 months. how long will it take to make that up in principal? a couple of years. dope.

another story. in a particular town there are a couple of houses on the market where the houses and land size are very similar. they're all on the market (and not sold yet) for about $40k less than a couple that sold in the spring. that's right, the spring peak buyers are now -$40k on their place which will take about 4-5 years to pay off on a 30-year fixed mortgage. these people have just lost the option to sell for a # of years unless they bring cash to the closing.

this is why you don't catch a falling knife folks. wait for a stable point to be found and make sure that stable point holds for at least 6 months.

7/20/2006 12:30:00 PM  
Blogger lisoosh said...

Richard - I concur.
There are a lot over overpriced townhouses sitting on the market, many of them standing empty and many a couple of doors down from the same house at a lower price also standing unsold.
The only reason I can see for someone holding out for the higher price is that they "need" that price to pay for their new home.

7/20/2006 12:34:00 PM  
Anonymous Anonymous said...

this article is ok... it does correctly say which way the metros are moving... but my lord! how many realtors or real estate agency or brokerages owners were quoted in this article! man... yikes! when is the media going to stop asking realtors if now is a good time to buy...

7/20/2006 12:54:00 PM  
Blogger delford said...

Richard, and those examples you give, like mine do not take into account, what the final selling prices might ultimately be;some of these people will be forced to hold for years.


I do no think the pride of home ownership is going to make up for the fact that people already are 50 to 100k in the hole, and it is just starting.


Like I have always said, once you over pay, you will have always over paid, you cannot rationalize that away.

7/20/2006 12:56:00 PM  
Blogger Flop that house said...

Richard,

can you specify the town or zip of the townhouses you talked about. That's about the range I am looking at.

or maybe listing number would help too. I need to establish a peak price for comparison

7/20/2006 01:02:00 PM  
Blogger delford said...

Richard, and those examples you give, also do not take into account, what the final selling prices might ultimately be;some of these people will be forced to hold for years.


I do not think the pride of home ownership is going to make up for the fact that peopel already are 50 to 100k in the hole, and it is just starting.


Like I have always said, once you over pay, you will have always over paid, you cannot rationalize that away.

7/20/2006 01:05:00 PM  
Anonymous Anonymous said...

DO NOT WASTE YOUR TIME DEALING WITH GREEDY GRUBBING SELLERS.

LET'EM SIT AND ROT!

KICK BACK HAVE A DRINK.

BOOOOOOOOOOOOOOYcott Houses

Bob

7/20/2006 01:22:00 PM  
Anonymous Anonymous said...

Richard,
I am also looking at townhomes in Mahwah. The 3 bedrooms range anywhere from 425K up. I have not noticed any declines in prices and noticed that they have been sitting for a while. I am going to wait until after the summer to see what happens. Hopefully, the prices will start to drop

7/20/2006 02:40:00 PM  
Blogger chicagofinance said...

KICK BACK HAVE A DRINK.
BOOOOOOOOOOOOOOYcott Houses
Bob
7/20/2006 02:22:02 PM

yes - cross off 2006

7/20/2006 03:46:00 PM  
Anonymous Anonymous said...

I'm new to this whole Real Estate thing, and I'm looking to buy at some point in the near future. I know prices have increased exponentially in the last few years, but how do you know how much a house SHOULD be worth? I've read that some people take the 1998 price and add 5% per year, but how do you find the histoical prices for a particular house? And when you add the appreciation value, do you compount that, or is it like simple interest?

JWR

7/20/2006 04:52:00 PM  
Anonymous Anonymous said...

Check out Clifton, Many townhomes
for sale. Price reduced.

7/20/2006 05:17:00 PM  
Anonymous Anonymous said...

Bergen County home pricing
holding firm. Alot of staying
power in BC.

7/20/2006 05:18:00 PM  
Blogger grim said...

Anon in BC,

Take a look:

Bergen Sold Homes Report

I'm not sure I see any "staying power" in this list of sales, but what I see is a majority of homes selling for under asking, with some great lowballs mixed in. Keep in mind that list doesn't take into account prior price reductions.

Caveat Emptor!
Grim

7/20/2006 06:19:00 PM  
Anonymous Anonymous said...

Haircuts are not that bad. No collapse

7/20/2006 06:39:00 PM  
Anonymous reinvestor101 said...

More gloom and doom here. Did anything good happen today? Did anyone happily close on a home today? Did anyone sell at a good profit today?

I'm betting someone did, but nooo, no one wants to talk about that.

Look guys, the sky is not falling, real estate continues to be bought and sold. Be happy and let go of the gloom. Let go of the giddiness anticipating the misfortune of others.

7/20/2006 08:23:00 PM  
Blogger chicagofinance said...

Ph.D. said...
-sorry for the tirade
7/20/2006 12:22:33 PM

Ignore what you don't like around here [including me if necessary]. We would rather have you participate than lose another set of valuable eyes because some of us are dedicated to being chowderheads.

regards

7/20/2006 08:47:00 PM  
Blogger chicagofinance said...

reinvestor101:

I'm giddy, because my MSFT might pay off after today's massive stock repurchase announcement. Too bad they can't grow the business and have to resort to capital structure tricks.

7/20/2006 08:52:00 PM  
Blogger Richard said...

anyone have any direct or indirect experience with ductless air conditioning systems? i heard you need indoor units that have to be mounted on a wall and could look obtrusive and ugly.

7/20/2006 10:15:00 PM  
Anonymous reinvestor101 said...

I'm giddy, because my MSFT might pay off after today's massive stock repurchase announcement. Too bad they can't grow the business and have to resort to capital structure tricks.

Well, Microsoft is a mature company with little in the way of options to grow sales. I've always questioned the wisdom of stock buybacks however. I understand the theory of using buyback as a tax efficient mechanism to make "distributions" to shareholders, but it just seems like such a waste versus just giving the shareholders $ 40 billion directly through an straight out dividend distribution. Hell, by the time they complete the buyback over the next 5 years, there may be something else weighing on the stock price that negates it.

7/20/2006 10:21:00 PM  
Anonymous Anonymous said...

Richard,

For an example on ductless airconditioning systems, go to www.mrslim.com.

No, you don't need the units indoors.

CNS

7/21/2006 12:55:00 AM  
Anonymous Anonymous said...

Whers space ghost to monitor the
room?

7/21/2006 02:56:00 AM  
Blogger chicagofinance said...

reinvestor101 said...
I've always questioned the wisdom of stock buybacks however. I understand the theory of using buyback as a tax efficient mechanism to make "distributions" to shareholders, but it just seems like such a waste versus just giving the shareholders $ 40 billion directly through an straight out dividend distribution.
7/20/2006 11:21:08 PM

Special dividend just gives money back. Stock buyback is perceived as a signal from management that stock is too low.

7/21/2006 10:55:00 AM  
Anonymous Anonymous said...

unrealtor,

I wonder how those job market ratings ('weak', 'strong', etc) correspond to the cities' relative placement on the Tax Foundation business climate ratings?

Could it be that if you're friendlier to business, that your state is more likely to have jobs, which make the job market stronger, which then attract taxpayers to work at those jobs?

Hmm, looks like something worth studying...

7/24/2006 03:37:00 PM  
Anonymous Anonymous said...

Special dividend just gives money back. Stock buyback is perceived as a signal from management that stock is too low.

It could also be a signal that management doesn't think there's much else to do with the money, in terms of stuff like R&D, hiring or CapEx, that would net a better ROI.

Like, say, MSFT, which has been starved of worthy ideas for a very long time (as Longhorn keeps getting pushed, pushed, pushed ahead)..

7/24/2006 03:40:00 PM  

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