June Pending Home Sales Down 9.6% YOY
From the National Association of Realtors (NAR):
Pending Homes Sales Index Rises
The PHSI data can be found here:
Pending Home Sales Index (PHSI) (PDF)
Caveat Emptor!
Grim
Pending Homes Sales Index Rises
Pending home sales – a leading indicator for the housing sector – have risen for the last two months, according to the National Association of Realtors®.
The Pending Home Sales Index,* based on contracts signed in June, increased 0.4 percent to a reading of 113.9 from an upwardly revised level of 113.5 in June, but is 9.6 percent below June 2005.
The index is based on pending sales of existing homes. A sale is listed as pending when the contract has been signed and the transaction has not closed, but the sale usually is finalized within one or two months of signing.
An index of 100 is equal to the average level of contract activity during 2001, the first year to be examined, and was the first of five consecutive record years for existing-home sales.
...
Regionally, the PHSI in the South rose 2.5 percent in June to 130.7 but was 4.8 percent below June 2005. The index in the Midwest increased 1.9 percent to 103.3 in June but was 11.9 percent below a year ago. The index in the West was unchanged, holding at 110.1 in June, and was 14.2 percent lower than June 2005. In the Northeast, the index dropped 6.3 percent in June to 99.4 and was 11.6 percent below a year ago.
The PHSI data can be found here:
Pending Home Sales Index (PHSI) (PDF)
Caveat Emptor!
Grim
23 Comments:
If I was a math wizard, I'd give a prediction on how this will be reflected in sales numbers for the coming months, but I'm not.
I'll give a guess anyway, YOY sales will be down somewhere between 10% and 20% over the next two months, each month.
Sellers, you may want to consider lowering prices below 2005 comps or pulling your houses off the markets. The main selling season is down and it's going in the books as a bloodbath.
JM
meant done, not down...
JM
Hey, RE101-
Love to hear your commentary on all the latest numbers.
JM
Info on Condo sales:
http://realestate.msn.com/buying/Articlekip.aspx?cp-documentid=710370
If sellers need to sell, I'd recommend they do what they need to sell.
Japan just saw it's first tick up in land prices in 14 years. That's right, the land market in Japan has been declining for 14 straight years. It's only now showing signs of stability. Can you imagine? Journalists are celebrating because the decline has stopped. How many more years will it take to break even? I'm not sure anyone would even dare a prediction.
For those who think you can simply hold on to property for 5 years and ride out a downturn, you might want rethink your position. I'm not saying that there isn't some probability of a 5 year recovery, but precedent that says otherwise has been set. And it's been set in a country where land is much more scarce than ours.
Caveat Emptor,
grim
Lots of houses are under contract, but not sold. I wonder how long a home can be under contract and if the number is counted in the pending Home Sales.
Boy I hope not. I stuck in a house I want to sell in about two years. I'd love to get out now, but have a wife that doesn't want to relocate atleast until then.
Can't seem to convince her we should sell now, as we only just "down sized" last year.
But I do think it we could retain more of any equity we might have by selling now, before it turns worse.
Also there are some under contracts eals off - I heard couple of houses ack on the market because buyers didn't show on the closing day..
Sellers, you may want to consider lowering prices below 2005 comps or pulling your houses off the markets. The main selling season is down and it's going in the books as a bloodbath.
JM
8/01/2006 10:33:57 AM
slide 4 describes this activity
http://njrereport.com/sd.ppt
OT, but I am guessing a sure sign of people overextended on their mortgages will be evident if they keep their windows open today through Thursday.
"I heard couple of houses back on the market because buyers didn't show on the closing day."
That's some stunt!
hey Richinnorthnj
those stats are great. can you get them for morris county? or, better yet, are statewide stats like that up on a public site?
i've seen a growing number "reappear" in the listings. i bet som smart buyers walked, waiting for a better deal.
holding off for now in morris cty
90.4% Fools especially those that purchased on the coastal bubblemarkets.
You are going to be underwater shortly on your purchase.
BAAAAAAAAAAWAAAAAHAHAHAHAHA
Bob
I heard couple of houses back on the market because buyers didn't show on the closing day.
Doesn't the seller get to keep the deposit (in my area, it's generally 10%) if that happens?
A deposit of 10 percent? That's a heck of alot of "good faith".
Deposits are typically closer to 1 percent.
grim
I am not sure how much deposit the previous buyers put and what happen to the money, this was a house which in the same community I was looking for.
I bet the buyers definitely feel worth to give up deposit comparing the house value down turn
Sorry I was talking about earnest money with the offer, not the second deposit. I'd love to hear the agents actual numbers on these. KL?
grim
How many more years will it take to break even? I'm not sure anyone would even dare a prediction.
In Japan, I think they had deflation (and 0% interest rates) so flat house prices weren't that bad..
I'm not sure I believe the bit about buyers not showing up at closing. Forfeiture of deposit is going to be the least of their problems.
grim
Two things,
Am I the only one who thinks the Northeast having contracts lower than in 2001 is a big deal?
The boom was just getting underway then, that's an unbelievable slow down.
And
Anon 2:31:51
Japan fought like hell against the deflation, that's why they had 0 percent interest. Property didn't sit, it went down. The only thing that allowed them to hike interest rates to a whopping 25 basis points this year was an insanely massive currency inflation that basically had them running the printing press.
They used all those yen to buy dollars in an attempt to drive their currency down, but we were able to put out more debt than they could swallow.
That's pretty much what is at the core of those great global imbalances guys like Steven Roach keep talking about.
Lindsey
Lindsey:
Japan has a lot of structural problems in it's banking system and in their government's and business leaders' spines. While it's good to review their situation as a point of reference, drawing parallels to the U.S. Economy is not entirely relevent, despite being helpful.
I don't think it's any great mystery why sellers are reluctant to lower prices.
If you had the choice between handing over $50,000 to $500,000 versus holding on until the bitter end, what would you do.
Panic has begun to set in...I think all parties agents, mortgage brokers, builders, sellers, etc. get that things have changed, but they're going to do everything possible to keep prices up as long as they can.
I'm not sure a Mexican standoff is the right analogy. More of a herd defense mentality versus a wolfpack, the weak members of the herd get picked off as they can't keep up by the wolf pack.
Homeowners who can't wait will start to get picked off by savvy buyers who know what realistic prices.
JM
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