July Otteau Report
From the Otteau Group:
SUMMER MARKET REMAINS COOL
July was another cool month for the housing market as declining buyer-confidence continued to take its toll on home sales. In July, contract-sales activity declined 11% from the June level and was 25% below the year earlier pace in July 2005. That this slowdown comes in the midst of the prime March-to-August selling season when home sales should still be running hot provides compelling evidence of a market transition wherein home buyers have greater control over final selling prices than at any time since 1991, a 15-year span.
From an inventory perspective, the number of homes being offered for sale now stands 67% higher than a year ago. This equates to a 9-month supply as compared to only 4-months last year at this time. It is however encouraging to note that Unsold Inventory increased by only 1.5% in July following a 47% increase over the 1st 6 months of the year, which works out to nearly 8% per month over that period. This moderation, coupled with recent declines in mortgage rates present home buyers with an opportunity window that will likely close once mortgage rates continue their upward climb.
From a price perspective, market conditions continue to exhibit the greatest weakness for luxury priced homes. As shown in the table at right, Unsold Inventory below $600,000 stands at an 8 month supply as compared to 27-months above $2.5 million. This weakness in the luxury market has been developing slowly for several years now and will likely continue for the foreseeable future. As a result, expect the market for more affordably priced homes to be the first to recover.
17 Comments:
At a certain point, the metrics become meaningless. Months of supply? Who cares?
Prices are too high, sellers haven't dropped them enough. Lots of property for sale, but due to high prices, few people buying. Broken record.
We need to see fresh closing data for the "in contract" sales of the last few weeks.
Anyone care to speculate on their characteristics?
chicago
i was thinking same thing. but last weeks numbers were nice to see. you can almost feel the desperation/pain of sellers and what they must be thinking ( that their house will never sell) although not too desperate because prices arent plummiting. our beloved bob has the right idea boycot.
questions: does nj association of realtors release numbers if so when?
The numbers are skewed by RE companies. Number of houses originally listed are intentionally reduced. These houses are still being shown to buyers.
Similarly asking price reported on MLS/GMLS is not the same as the asking price the agent communicates with a buyer.
They are all in the game here. Don't believe all you read is 100% truth.
pretty interesting and not seen for over a decade in Hoboken
http://newjersey.craigslist.org/rfs/192108632.html
Looks like the NJAR Q2 data is finally out, I'm not sure when it was released but I didn't see it mid-week last week.
http://www.njar.com/2006Q2.pdf
Didn't have much of a chance to look at it yet.
grim
Chicago:
I'll speculate, but only about my area, and when I speculate, it's based on info from real people. It helps to be short, chatty and a non-threatening type on walks.
New comps [houses sold July] are down 15-20% since spring for median homes. This is a limited sample due to my limited walking radius.
But this data will not be available in statistics until January.
Pat
Down 15-20% comps? Smell Blood!
Chicago, what about the $379K, one bedroom condo hasn't been seen for a decade in Hoboken?
As this chart illustrates, buy now and you're a fool:
http://tinyurl.com/e4so5
Rich,
do you see increase in cancellations after the July housing report came out?
Check out page 14 of the NJAR 2Q06 report...Funny how the gap between median income and qualifying income grows when credit tightens! Looks like the mortgage brokers are fudging numbers. $9k difference this qtr vs. $1k difference in 3Q05
Adjacent to where I rent (border of North and South Brunswick in Middlesex county), I have seen $50K decline in listing price for identical townhouses. 6 months back, a 3 bed townhouse was on the market for $349K. I saw 3 on the market last week for $298K....wonder if any buyer's are biting as yet?
Prices have to give way to adjust for imbalances.... when is just a matter of time, given the vacuum created by buyers who brought their purchases forward. Can someone create a 'regret index' for people who bought in the past 18-24 months?
That craigslist posting isn't Hoboken, it's Jersey City.
any word on how Khov is doing
with their w.paterson complex.
814 units for sale. what a project.
i understand is an over 55 and its
a 7 year affair.
I dont see them advertised much.
Holy St Joseph statue, Batman. That is a major change in inventory.
Blam!
This comment has been removed by a blog administrator.
That Hoboken 1-bedroom condo is located technically in Jersey City right next to the NJ Transit railroad tracks. It couldn't be in a crummier area. They're also building a new condo complex adjacent to it called 700Grove (www.700grove.com). Take a look at this website---it's quite comical!
This development gives its occupants a panoramic view of the NJ Transit railroad tracks and, if you're lucky when you buy your 400K studio, you get to hear the train whistles blow as they come in and out of Hoboken. What a deal!
When you click on "the neighborhood" tab of the website you will hear fancy jazz music and see a tiny-print disclaimer saying the view you see in the website is not the view you get from the units!
To its credit, the Hoboken PATH station is only a 5-10 min walk away.
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