Prices Fall In 87 Metro Areas
From the NY Times:
Home Prices Fall in Nearly One-Fourth of Metropolitan Regions
Home Prices Fall in Nearly One-Fourth of Metropolitan Regions
Prices of traditional single-family dwellings fell in 87 of the nation’s 379 major metropolitan areas from the first quarter to the second, the government reported yesterday, as the overall value of homes leveled off across the country.
On a quarterly basis, prices were lower in Boston, Sacramento, Pittsburgh and much of the Midwest, where the loss of manufacturing jobs has hit the housing market hard.
...
Price declines are spreading to more parts of the country. The 89 areas affected in the second quarter compares to 66 metropolitan areas where prices fell in the first three months of the year. In the fourth quarter last year, only 29 areas reported such declines.
Prices were lower in five states — Michigan, Massachusetts, Maine, Ohio and Indiana — though the declines were less than 1 percent. Just one state, Iowa, had a price decline in the first quarter and none did in the fourth quarter last year.
“The slower sales get, and given where inventory is, it is going to require sellers to cut prices in certain markets,” said Celia Chen, director of housing economics at Moody’s Economy.com.
Ms. Chen noted that the index showed that prices were still rising in much of California, Arizona and Florida, states that experienced some of the biggest rises during the recent boom. But that may be in part a result of the fact that the government’s home price measure does not include homes with mortgages greater than $417,000.
By comparison, data from the National Association of Realtors showed that the national median home price for existing homes, the price at which half sold for more and half for less, increased 0.9 percent in June from the same month a year ago. That measure, however, is not adjusted for changes in the quality and size of homes sold from one year to the next, which the government index does take account of.
26 Comments:
Good piece on Freddie and Fannie from Bloomberg:
Fannie Mae, Freddie Mac Retreat as Mortgage Bond Market Mutates
Inflation expectations picking up again..
U.S. 2nd-Qtr Productivity Rises 1.6%; Costs Up 4.9%
U.S. worker productivity slowed last quarter and labor costs rose more than expected, suggesting inflation pressures persist as the economy cools.
Productivity, a measure of how much an employee produces for each hour of work, increased at an annual rate of 1.6 percent after a 4.3 percent gain the previous three months, revised figures from the Labor Department showed today in Washington. Labor costs rose at a 4.9 percent pace, compared with a revised 9 percent rise in the first quarter that was the biggest since 2000.
The slower gains in efficiency reflect a cooling in the economy during the quarter. The bigger than expected rise in labor costs, which account for about two-thirds of the cost of goods and services, may heighten concerns that inflation will accelerate as businesses lift prices to compensate.
``Labor costs are a serious element in the inflation picture,'' Douglas Lee, president of Economics From Washington in Potomac, Maryland, said before the report. ``As long as the unemployment rate remains below 5 percent, there is no reason to expect these pressures to dissipate.''
Auctions in Boston, from the Boston Globe:
Going once...
In echo of '90s bust, auction set for 34 unsold luxury condos in Hub
he developer of a new luxury condominium project in Boston's financial district is resorting to a tactic last seen in the real estate bust of the 1990s: It's holding an auction for the 34 remaining, unsold condominiums.
A minimum bid will be required for each unit. A one-bedroom currently offered for sale at $480,000 will be sold at or above its $325,000 minimum price. The most expensive unit to be auctioned, a $1.76 million, two-bedroom with a wraparound terrace on the 14th floor with a waterfront view, has a $1.025 million minimum price.
``There's been a stalemate between the buyers and sellers," said Jon Gollinger, whose firm, Collaborative Cos., was the sales agent for Folio's condos, and who will handle the auction through his other firm, Velocity Marketing.
``We want the market to determine the value," he said. ``We're starting at a price that's laughably low."
...
The last time auctions were popular around Boston, the real estate market was in crisis. ``I was around in the late '80s and early '90s when all that went on, and I kind of cringe. Are we doing this all over again?" said Diane Maloney, president of Marketing Group of New England who markets the 44-unit loft building on Broad Street, near Folio.
i'm seeing my local prices coming back down to peak prices summer 05. i've been in the market since feb. 06. it seems sellers ( agents ) tacked on 20% to last years peak prices and they've been dropping ssslowwwlyyy.
there are several houses that have asking prices 10% or less then what they paid a year or two ago so they will break even at best.
Looks like the brokers are striking back with their own blog: http://www.greenbaumgroup.blogspot.com/
some of the builders of
all these new units, soon
will be suffering, unless
they have the deep pockets and
the bank to go along with the
pressure.
The smart ones will want to move
on and will lower the price, or use
the auction .
The stupid ones will sit and
suffer and hope for the spring
buyers.
It seems that grubbers think they are entitled to an increase every year.
NOT this year. Losses in store for this bunch.
Bid alot less like 25% less.
It's not your duty to bail out a fool.
lets say i have an 'informed' position on consumer spending... particularly on DIY market, less so on retail... i can tell you the sales/profit forecasts are dropping quick. there is pressure on the 'big boxes' and the suppliers (where big boxes represent somewhere btwn 30-70% of their revenue).
belt buckles are being tightened compared to '05 and '04 in this area for sure... no matter how much we are paying for a gallon of gas, cup of coffee, or (sorry) a $300 pair of jeans.
curious
"If you plan to make an offer, don't base it on today's prices, base it on what you think the bottom will be."
Very wise. Prices are a moving target but going south.
“A one-bedroom currently offered for sale at $480,000 will be sold at or above its $325,000 minimum price. ‘I wish I could’ve bought my unit for less money,’ said Christine White purchased a one-bedroom on Folio’s second floor in the ‘low $400,000s’ earlier this year.”
Lots of fools will be "regretting" their inpatience and foolishness.
Shoulda coulda woulda.... But the starving grubbers asays it's always a good time. NOT THIS TIME!
Bagholder Christine White says:
"I wish I could've bought my unit for less money"
You could have Christine, you could have...
Losing $100K in less than one year is rough.
What would Suzanne recommend?
i think grubbers is replacing booya
Market price dynamics work in both up and down markets, and we are in a down market right now.’”
This is absolutely right grubbers, it's not a one way street to riches. Now the losses will mount.
Anyone that thinks that 5 years of insanity will be corrected by spring of 2007 is a friggen dreamer.
"Bargains" what bargains???
If this corrupt housing market drops 30% it only gets this bloated overpriced housing market back to long-term trend. This is NO bargain.
Housing market is in freefall right now. unfortunately the grubbers will spin, hide and manipulate the facts to fool a few more last of the bagholders.
The housing market is much more transparent today than 15 years ago due to internet and bloggers. This is why i expect the drop to be much more severe and swift. Bottoming in 2008 and scraping bottom for a few more year. It will be hell for REland and the starving grubbers in 2007 and 2008.
Get used to it!
“For an idea whether the housing market is in for a soft landing or something a lot nastier, take a look at the performance of home equity loans. Last week, Moody’s Investors Service reported that the delinquency rate in the home equity loan market rose 11 percent for the quarter ended in April from the same period a year earlier.”
“‘This is the 11th consecutive month that the home equity delinquency growth rate has risen,’ Moody’s Ben Garber said.”
“To give you an idea how quickly the market turned, the delinquency growth rate was falling at a 27 percent annualized rate in the quarter ended May 2005. In the space of 11 months, we’ve rotated from vast improvement to sharp deterioration. According to Moody’s, delinquent loans now represent nearly 7 percent of the total existing pool of home equity loans.”
“For homeowners who are missing payments on their home equity loans, it boils down to what home prices have done for them lately. The biggest irony is that the rampant borrowing will exacerbate home price declines.”
“‘The home price drop-off has been aggravated by the rising inability of current and potential homeowners to fulfill loan obligations,’ Mr. Garber said
These are recourse loans.
Be fearless! RE always goes up, "NEVER" down. NOT!
A massive attitude adjustment is in store for many free wheeling spenders.
bababaa
Bust!
GLUTS AND GLUTS OF HOMES LITTER THE COUNTRY. BUT WE HAVE A SHORTAGE?
NOT!
TAKE A LOOK DUMMIES.
http://www.financialsense.
com/fsu/editorials/
jain/2006/0906.html
http://tinyurl.com/nuowe
"According to Moody’s, delinquent loans now represent nearly 7 percent of the total existing pool of home equity loans."
Things 'started to get crazy' in 2001:
http://tinyurl.com/e4so5
It's a long way down.
For those who bought near the 100-year peak, my condolences.
DO NOT BUY A HOUSE AT THESE RIPOFF PRICES ...MOST ESPECIALLY A CONDO.
YOU WILL REGRET IT WHEN YOU ARE SITTING MASSIVELY UNDERWATER.
listen to this bagholder.
“A one-bedroom currently offered for sale at $480,000 will be sold at or above its $325,000 minimum price. ‘I wish I could’ve bought my unit for less money,’ said Christine White purchased a one-bedroom on Folio’s second floor in the ‘low $400,000s’ earlier this year.”
Video of a FB attacking a TV reporter:
http://tinyurl.com/j4fz3
I can't hear the sound, what are they fighting about?
Towards end of last year, a friend ran feverishly to buy a house. Reason ? Growing intrest rates. They wanted to utilise the low rate they had locked a few months prior, and which was locked only for 6 months. Bought a house in Jan 06 for 365K. No, absolutely no works done on the house in the past few years, the kitchen is broken and bathrooms so old and shabby, and friend is spending a lot on repairs.
I begged her to wait, I said there is a chance that interest rates might come down and they can refinance perhaps at some point in future, but purchase price is a constant.
The previous sale from domania for the house shows 230K in March 2004. I dont have the heart to give her this info, that someone flipped it for a 58% profit in 1 year and 10 months.
I myself would wait until 2008 before making any real estate purchase. I think 2007 will be the watershed year when realisation will finally dawn on buyers and sellers, and it will be in 2008-09 that we will see some realistic valuations.
"I dont have the heart to give her this info, that someone flipped it for a 58% profit in 1 year and 10 months."
A colleague paid $670K for a house last year. The owner before? Bought it in 2003 for $355K. New house, there were no 'improvements' to make. Those sellers must have been high-fiving for days.
She subscribes to the 'real estate only goes up' school, so I've never mentioned what the first owner paid just two years earlier.
Shame.
LOL, look at this bagholder:
23 Ferncliff Terrace
Short Hills
MLS 2277945
Listed: May 14, 2006
Under Contract: May 29, 2006
Closed: July 20, 2006
List Price: $ 1,425,000
Sold Price: $ 1,490,000
How such a moron makes enough money to "buy" a $1.5M house that's surrounded by $800K houses just steps from a busy street is beyond me.
There are/were so many beautiful houses for less on the market since April.
On the market only 15 days.
Sucker paid $1.5M!!!!!!
Taxes of 'only' $15K should have set off red flags -- YOU ARE A BAGHOLDER. The 'real' $1.5M houses in this town have taxes of $25K+.
The Greater Fool champion!
UnRealtor,
thats one damn bagholder.
That SOB will be swinging from a noose in a few years.
;)
SAS
SAS, I stil can't believe it.
It's assessed @ $740,400, and these idiots paid more than double that value! No one does that, even for 'unique' houses (e.g., "on the pond").
Here's a house that was on the market at the same time:
MLS 2251238
Assessed value: $787,600
Sold for $999K in June.
Bigger lot, better location, better house, sold for $500K less! Can you imagine dumping even $200K into the $999K house? It would be a palace, and still be $300K less!
People are brain dead.
I can just hear the realtor now "We have another offer coming in tonight, better make an offer."
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