I ran into a head honcho from a Real Estate Economics firm who shall remain anonymous. He gives speeches to conference halls full of realtors. He didnt know that Im a part time real estate geek so I asked him what he has been telling people at these conferences. His non-verbatim reply: We look through all of the data and try to find any bit of good news so people can leave happy.
Yet we are still quite far from house prices reverting to the "historical mean". I see this ending when the last of the bottom-callers capitulates and says that housing will never recover. I say this only because bear markets have typically ended when blood ran in the streets.
According to Dataquick, "economic indicators are moving in different directions". How can they still be moving in "different directions" if everything's moving down?
Oh wait... only sales and prices are down --inventory, foreclosures and NODs are way up. That explains it.
Question: What is the relationship between sales volume and prices? I don't see how low volume itself means "bust" to me. Is it a leading indicator to dropping prices?
Realtors, sure..... it's a bust for them, they need sales.
Strictly speaking, 46 states is not "everywhere".
Nemo | Homepage | 02.14.08 - 1:46 pm | #
True,
South Dakota was up slightly and North Dakota was unched, the remainder did not have data. So should be modified to say "everywhere people actually live"
Yeah, but everyone was just waiting for the Superbowl. Who would risk watching such a historic game in a strange living room? What if you left the remote in a strange built-in halfway through the game? shudder
Question: What is the relationship between sales volume and prices? I don't see how low volume itself means "bust" to me. Is it a leading indicator to dropping prices?
Realtors, sure..... it's a bust for them, they need sales.
query_tool | 02.14.08 - 1:58 pm | #
Yes, historically housing markets move in slow motion, first volume dries up as sellers hold on to first what their neighbor got 6 months earlier, and then on to what they actually paid or what the mortgage is on the property. Buyers wait it out knowing that doing so will save them tens if not hundreds of thousands. Eventually the sellers capitulate. Probably 2/3 of the way through the decline in existing home sales by volume, 20% of the way based on price.
What is the relationship between sales volume and prices?
If sales is a reflection of demand, then, as Econ 101 teaches us, when demand falls so do prices. Real estate is not as simple as the classic widget, but it is safe to say that when sales volume falls, inventory increases, and when inventory is high, there is much less pressure on buyers to pay high prices. Whether this translates to lower prices depends largely on how long would-be-sellers can hold out without selling.
It's interesting New Mexico and Louisianna are mentioned, which raises the interesting question: what about Texas, mentioned over and over as a "strong" housing market. Given as an example over and over to say some big markets are "fine", a month or 2 ago....
Real estate is not as simple as the classic widget, but it is safe to say that when sales volume falls, inventory increases, and when inventory is high, there is much less pressure on buyers to pay high prices.
right ken -- the key part is not sales so much as inventory. slower sales with unchanged supply means inventory buildup, which means price cutting to clear inventory.
i think the sales data that CR so adroitly offers is best viewed in the context of both inventory and new construction.
As someone who once lived in NJ, I'd say there are a lot of other reasons to wish you didn't live there. Cheap housing is probably somewhere on the list but it would probably have a hard time making the top 10.
by my math Dec yoy number of sales was about -21%, and 4Q yoy number of sales about -15%.
hal, i live in chicago -- the price declines have picked up some since july of course, but what i think is the most interesting aspect locally is the average listing time.
houses clear in san diego now in under 70 days -- prices declines have helped to move supply. in chicago, it's climbed to 138 days -- among the longest in the nation, just behind miami. the clear (imo) message: prices haven't fallen nearly far enough yet, regardless of how far we think we are from california and florida.
Hm, there actually is a NHAR, so I wonder why the national report doesn't have NH numbers.
There were 11,989 single-family homes sold in 2007, a drop of 10.3 percent from the 13,364 sold in 2006. The median sale price of those transactions, however, fell only 1.6 percent from $265,000 in 2006 to $260,800 in 2007.
I'd like to know how the real estate mafia managed to bid up home prices in Wyoming of all places.... is there are second- and vacation- home market for out-of-staters up there?
You know with national figures up around 10 months, I've thought of Texas as moderately low (close to 6 months), but close to 6 months in winter isn't exactly low actually in Texas since the early 90s bust. You've got to wonder at SD and Chicago -- how many sellers are waiting for the spring.
Bob Dobbs - oil is the reason. Also Jackson Hole is nice, but it's primarily a resource issue.
TS, of course. I went to law school in Newark, never lived in Essex County but there are some really beautiful towns to go along with the blighted urban spaces.
It was picked up over at Housing Wire that the National Association of Home Builder (NAHB)'s Political Action Committee has suspended political donations in retaliation for the fact that Congress left numerous NAHB priorities out of the recently-passed stimulus bill.
Their release says the PAC will "cease all approvals and disbursements... until further notice." Some local accounts describe the builders as "just furious" and described this move, which is virtually unprecedented inside the Beltway, as "the actions of a very angry group of people."
Now we're getting more info on why they're so hopping mad...
Gary: I live in one of those nice towns. But the taxes are too much for me. I will move to a less expensive town when the time comes but renting here has been a blast.
Bob Dobbs,
More correctly, it is energy in WY coupled with transportation jobs needed to move it. Oil, gas, coal, uranium, and railroads are huge in that windy, god-foresaken state. Energy pays well, so lots of new pick-ups and money to buy homes. Once the boom ends, though, every still sane person tries to get the hell out of there, because of the constantly blowing wind.
You've got to wonder at SD and Chicago -- how many sellers are waiting for the spring.
scads, to be sure -- also some buyers, but i suspect (hope?) this year tells the tale and sees chicagoland start to catch up on the downside a bit. price-to-income here is still 125% of the l/t norm, and my wife REALLY wants a house.
On the corner of S. Michigan and 14th alone there are three high rise condos being built... three!
Gaius Marius,
As I am also a(n) - optimistic - resident of Chicago, look on the bright side: there will be plenty of places for visitors to stay during the 2016 Olympics.
pasty people in plaid pants? Before I've never felt unwelcome here, but now . . . and I'm not even from the Dakotas.
The reason New Hampshire isn't in the stats is that it hasn't been part of the United States since William Loeb resurrected the Republic of Greater Indian Stream.
Is it a "bust" if home sales decline -- or if prices decline?
The NAR's Q4 metro area home price report is a better indication of which areas are facing the most stress, IMO.
73 metros had y-o-y price increases, while 77 had decreases (and only 16 had drops of more than 10%). The major "decliners" were in the usual places--CA, FL, MI, NV, OH.
I guess that's not as eye-catching a headline, however....
House prices only go up.
Strictly speaking, 46 states is not "everywhere".
They must have made more land in those 46 states.
Just took a drive to get a car wash about 6 miles away. Still building away!
Damn I wish I did not live in NJ. I could get a house cheap in a lot of other places.....
I ran into a head honcho from a Real Estate Economics firm who shall remain anonymous. He gives speeches to conference halls full of realtors. He didnt know that Im a part time real estate geek so I asked him what he has been telling people at these conferences. His non-verbatim reply: We look through all of the data and try to find any bit of good news so people can leave happy.
These numbers are reflective of that massive migration to South Dakota we keep hearing about.
South Dakota: still the last place any trend catches on.
Sure, they're pasty pudgy practical people in plaid pants, but they're selling more houses than you tanned slim extravagant Californians! Ha!
They keep rezoning so maybe the builders can make more money with more houses on smaller lots. Sad!
Yet we are still quite far from house prices reverting to the "historical mean". I see this ending when the last of the bottom-callers capitulates and says that housing will never recover. I say this only because bear markets have typically ended when blood ran in the streets.
According to Dataquick, "economic indicators are moving in different directions". How can they still be moving in "different directions" if everything's moving down?
Oh wait... only sales and prices are down --inventory, foreclosures and NODs are way up. That explains it.
...selling more houses than you tanned slim extravagant Californians!
Don't forget doubly-augmented, heavily-Botoxed, hedonistic, realtoric, etc...
PS These are $500K houses and up also!
Question: What is the relationship between sales volume and prices? I don't see how low volume itself means "bust" to me. Is it a leading indicator to dropping prices?
Realtors, sure..... it's a bust for them, they need sales.
Strictly speaking, 46 states is not "everywhere".
Nemo | Homepage | 02.14.08 - 1:46 pm | #
True,
South Dakota was up slightly and North Dakota was unched, the remainder did not have data. So should be modified to say "everywhere people actually live"
So. Dakota real estate market must be buoyed by the Canadian "loonies".
-- Hiding Out
Did they really sell 39 houses in South Dakota?
NAR reported this?! Reality could really be disastrous!
Yeah, but everyone was just waiting for the Superbowl. Who would risk watching such a historic game in a strange living room? What if you left the remote in a strange built-in halfway through the game? shudder
Question: What is the relationship between sales volume and prices? I don't see how low volume itself means "bust" to me. Is it a leading indicator to dropping prices?
Realtors, sure..... it's a bust for them, they need sales.
query_tool | 02.14.08 - 1:58 pm | #
Yes, historically housing markets move in slow motion, first volume dries up as sellers hold on to first what their neighbor got 6 months earlier, and then on to what they actually paid or what the mortgage is on the property. Buyers wait it out knowing that doing so will save them tens if not hundreds of thousands. Eventually the sellers capitulate. Probably 2/3 of the way through the decline in existing home sales by volume, 20% of the way based on price.
What is the relationship between sales volume and prices?
If sales is a reflection of demand, then, as Econ 101 teaches us, when demand falls so do prices. Real estate is not as simple as the classic widget, but it is safe to say that when sales volume falls, inventory increases, and when inventory is high, there is much less pressure on buyers to pay high prices. Whether this translates to lower prices depends largely on how long would-be-sellers can hold out without selling.
TEXAS
It's interesting New Mexico and Louisianna are mentioned, which raises the interesting question: what about Texas, mentioned over and over as a "strong" housing market. Given as an example over and over to say some big markets are "fine", a month or 2 ago....
Texas Housing Sales, Prices and Listings
by my math Dec yoy number of sales was about -21%, and 4Q yoy number of sales about -15%.
Even Anna Nicole's brassiere could not contain a bust of this magnitude.
How are we going to keep a lid on the pent-up demand? The pressure must be incredible. It's going to blow it's top.
Tom Servo, whereabouts in NJ? I'm an NJ native (now in NY).
Real estate is not as simple as the classic widget, but it is safe to say that when sales volume falls, inventory increases, and when inventory is high, there is much less pressure on buyers to pay high prices.
right ken -- the key part is not sales so much as inventory. slower sales with unchanged supply means inventory buildup, which means price cutting to clear inventory.
i think the sales data that CR so adroitly offers is best viewed in the context of both inventory and new construction.
Is it too late to get in on the South Dakota real estate boom? Has anyone called the top?
Be patient. You'll have your chance.
Even Anna Nicole's brassiere could not contain a bust of this magnitude.
LOL!
Massive horny thing, looking for meat...
Does anyone know why there are no NH numbers for any time period? Thx.
Tom Servo
As someone who once lived in NJ, I'd say there are a lot of other reasons to wish you didn't live there. Cheap housing is probably somewhere on the list but it would probably have a hard time making the top 10.
by my math Dec yoy number of sales was about -21%, and 4Q yoy number of sales about -15%.
hal, i live in chicago -- the price declines have picked up some since july of course, but what i think is the most interesting aspect locally is the average listing time.
houses clear in san diego now in under 70 days -- prices declines have helped to move supply. in chicago, it's climbed to 138 days -- among the longest in the nation, just behind miami. the clear (imo) message: prices haven't fallen nearly far enough yet, regardless of how far we think we are from california and florida.
The killer aspect of low volume is the lack of price discovery. True market-clearing prices are well south of those reported.
Hm, there actually is a NHAR, so I wonder why the national report doesn't have NH numbers.
There were 11,989 single-family homes sold in 2007, a drop of 10.3 percent from the 13,364 sold in 2006. The median sale price of those transactions, however, fell only 1.6 percent from $265,000 in 2006 to $260,800 in 2007.
http://www.nhar.org/press/2007/4QPR.pdf
I'd like to know how the real estate mafia managed to bid up home prices in Wyoming of all places.... is there are second- and vacation- home market for out-of-staters up there?
Gaius marius:
Ahh, Chicago . . . home to two (2!) of the most massive towers in the country currently under construction.
I'll take my first visit to the Windy City when the Calatrava spire is completed.
Obviously there is no bubble. If there was, then why have sales INCREASED in South Dakota!?! Why do you people hate America?
All is well!!!
Thank God for the Dakotas!
IMHO the South Dakota thing is due to it's popularity as a primo location for building bunkers.
Gary, I live in West Essex County, renting of course....
South Dakota Top 5 agriculture commodities, 2001
Gaius -- in chicago, it's climbed to 138 days
You know with national figures up around 10 months, I've thought of Texas as moderately low (close to 6 months), but close to 6 months in winter isn't exactly low actually in Texas since the early 90s bust. You've got to wonder at SD and Chicago -- how many sellers are waiting for the spring.
Bob Dobbs - oil is the reason. Also Jackson Hole is nice, but it's primarily a resource issue.
TS, of course. I went to law school in Newark, never lived in Essex County but there are some really beautiful towns to go along with the blighted urban spaces.
Do we need to differentiate between SD hogs & mortgage pigs?
Gary - which law school? Seton Hall or Rutgers...I'm Seton Hall law...
It was picked up over at Housing Wire that the National Association of Home Builder (NAHB)'s Political Action Committee has suspended political donations in retaliation for the fact that Congress left numerous NAHB priorities out of the recently-passed stimulus bill.
NAHB Suspends Political Contributions over Housing Discontent : HousingWire || financial news for the mortgage market
Their release says the PAC will "cease all approvals and disbursements... until further notice." Some local accounts describe the builders as "just furious" and described this move, which is virtually unprecedented inside the Beltway, as "the actions of a very angry group of people."
Now we're getting more info on why they're so hopping mad...
Sorry if this was posted somewhere already: "Repo lots overflow with reclaimed cars"
Repo lots overflow with reclaimed cars - USATODAY.com
Housing sales increas by as much as 8% in some* markets!
Big ?, I'm Scarlet, through and through.
Have a few friends who went to Seton Hall though. And of course, every damn CLE I have to trek into NJ for is at Seton Hall.
Gary: I live in one of those nice towns. But the taxes are too much for me. I will move to a less expensive town when the time comes but renting here has been a blast.
Bob Dobbs,
More correctly, it is energy in WY coupled with transportation jobs needed to move it. Oil, gas, coal, uranium, and railroads are huge in that windy, god-foresaken state. Energy pays well, so lots of new pick-ups and money to buy homes. Once the boom ends, though, every still sane person tries to get the hell out of there, because of the constantly blowing wind.
Should I add that it seems we are all busted now?
Gary,
No problem with Rutgers...went to the NB campus for undergrad...oh those were the days...
since I'm licensed in NY not NJ, I never had to do that...
You've got to wonder at SD and Chicago -- how many sellers are waiting for the spring.
scads, to be sure -- also some buyers, but i suspect (hope?) this year tells the tale and sees chicagoland start to catch up on the downside a bit. price-to-income here is still 125% of the l/t norm, and my wife REALLY wants a house.
I went to Rutgers College in NB as well. Those were the days indeed.
Now we have season tix for football, which has been fun, though it's a hell of a commute.
It's always springtime in San Diego.
Suburbs of Chicago (Northbrook, Elmhurst, Arlington Heights) are awash with vacant $800+k spec McMansions built on teardown lots.
Gary,
On the corner of S. Michigan and 14th alone there are three high rise condos being built... three!
Gaius Marius,
As I am also a(n) - optimistic - resident of Chicago, look on the bright side: there will be plenty of places for visitors to stay during the 2016 Olympics.
Here in Taos, New Mexico nothing is selling..Not even Cheesy Condos..so we are doing our part to be part of the BUST
51 states?
pasty people in plaid pants? Before I've never felt unwelcome here, but now . . . and I'm not even from the Dakotas.
The reason New Hampshire isn't in the stats is that it hasn't been part of the United States since William Loeb resurrected the Republic of Greater Indian Stream.
Is it a "bust" if home sales decline -- or if prices decline?
The NAR's Q4 metro area home price report is a better indication of which areas are facing the most stress, IMO.
73 metros had y-o-y price increases, while 77 had decreases (and only 16 had drops of more than 10%). The major "decliners" were in the usual places--CA, FL, MI, NV, OH.
I guess that's not as eye-catching a headline, however....
South Dakota Top 5 agriculture commodities, 2001
In North Dakota, the #1 cash crop is missiles.
How many of you dumbasses own your house despite the fact that you would be better of renting?
How many of you numb-nuts don't know enough math to realize you're losing money by owning your home?
Which one of you wants to be the last one to try to sell your house?