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House Crash Starts To Spread Accross The Nation

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http://www.signonsandiego.com/news/busines...-homesales.html

Home sales slow in spring with 28 states, DC, suffering outright declines

By Martin Crutsinger

ASSOCIATED PRESS

7:33 a.m. August 15, 2006

WASHINGTON – The slowdown in the once-sizzling housing market is spreading, with 28 states and the District of Columbia reporting spring sales declines, led by big drops in former boom areas of Arizona, Florida and California.
Nationally, sales were down 7 percent in the April-June quarter this year compared with the same period in 2005, the National Association of Realtors said Tuesday in its latest state-by-state look at housing conditions around the country.
The Realtors survey showed that the biggest declines occurred in states that had been enjoying red-hot sales during the five-year housing boom.
The five biggest declines this spring compared to the April-June period of 2005 were Arizona, down 26.9 percent; Florida,down 26.7 percent; California, down 25.3 percent; Virginia, down 23.9 percent, and Nevada, down 23.5 percent.

The crash is becoming so pervasive that even the Realtors are no longer trying to spin the news. The situation on the ground is simply too terrible to call it any other way than it is: the start of another Great Crash:

Great Crash 2

:blink::o:unsure::(:blink::o

Edited by Realistbear

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realist, i posted this on the fed reserve thread when it came out on afx at 1429.

..awful lot of new threads being created - makes them harder to read imo.

quality vs. quantity maybe?

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realist, i posted this on the fed reserve thread when it came out on afx at 1429.

..awful lot of new threads being created - makes them harder to read imo.

quality vs. quantity maybe?

dinna nay see it. :unsure:

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dinna nay see it. :unsure:

You mentioned Florida down 26% that confirms what my friend was telling me last week,he lives an hour north of West Palm Beach,prices had been booming when I was there last year ,I was thinking about buying ,good job I didn`t.

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How long until the drop in sales volumes translates into consistently falling prices though? Could just get a stagnating market for a while as sellers refuse to lower their unrealistic expectations?

Still, fingers crossed etc. :)

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Guest wrongmove

How long until the drop in sales volumes translates into consistently falling prices though?

It doen't usually take long, but it depends how high sales had risen before the drop. Once sales reduce below natural turnover (i.e. all the speculators have gone, and even 'normal' buyers are holding back) the prices will fall. It is already seems to be happening in parts of the States. From the same article:

"The biggest price drops [in actual prices] in percentage terms were in Danville, Ill., where home prices fell by 11.2 percent in the spring compared with the spring of 2005, and the Detroit area, where home prices were down 8 percent."

More information would be needed (most importantly the number of sales used to complie the data, and whether or not the data is mix adjusted i.e comparing like to like) before the reliability of the figure could be assessed.

Edited by wrongmove

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Guest wrongmove

Another article on the same subject: U.S. Homebuilder Confidence Index Plunges to Lowest in 15 Years

"U.S. Homebuilder Confidence Index Plunges to Lowest in 15 Years

Aug. 15 (Bloomberg) -- Confidence among U.S. homebuilders plunged to the lowest level in 15 years this month as buyers cancelled orders and inventories of unsold dwellings piled up, a private survey showed.

The National Association of Home Builders/Wells Fargo index of builder confidence fell to 32 from 39 in July, the Washington- based association said today. It was the seventh consecutive monthly decline....

...``A decline in sentiment means builders are pulling back aggressively,'' Haseeb Ahmed, an economist at JPMorgan Chase Bank in New York, said before the report. ``We already have a problem of high inventories. Builders are making sure it doesn't get worse.''.....

.... Americans bought fewer new homes than forecast in June, leaving a record number of unsold dwellings on the market, the Commerce Department said July 27. Sales of previously owned homes fell to the lowest in five months, the National Association of Realtors said July 25.

The glut of unsold homes is trimming profit margins at builders and prompting them to offer incentives such as luxury- car leases, free golf course memberships and sub-zero refrigerators.

`Bumpy' Market

Toll Brothers, the largest U.S. luxury home builder, said on Aug. 9 that homebuilding revenue in the quarter ended July fell for the first time in four years.

Hovnanian, New Jersey's largest homebuilder, said Aug 4. that profit this year will be as much as 32 percent lower than predicted. KB Home has forecast 2006 profit will grow at the slowest pace in five years.

``The market is very, very bumpy,'' Bruce Karatz, chief executive officer of KB Home, said in an interview on Aug. 9. ``It is a very uncertain period for home buying'' and there is ``tremendous hesitation'' among buyers. ....."

From a post on TMF, here is the NAHB website: http://www.nahb.org/page.aspx/category/sectionID=134

Edited by wrongmove

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You mentioned Florida down 26% that confirms what my friend was telling me last week,he lives an hour north of West Palm Beach,prices had been booming when I was there last year ,I was thinking about buying ,good job I didn`t.

Just returned from Florida, For Sale signs everywhere. Great news item on state news channel saw desperate and bored realty agents having so much time on their hands that they congregate daily to attend church to pray for some buyers to return to the market..........the poor chaps took it well, but OH would I love to see that happen in the UK, but one feels UK EA's would rather die than lose the smug grins off their faces...............

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Just returned from Florida, For Sale signs everywhere. Great news item on state news channel saw desperate and bored realty agents having so much time on their hands that they congregate daily to attend church to pray for some buyers to return to the market..........the poor chaps took it well, but OH would I love to see that happen in the UK, but one feels UK EA's would rather die than lose the smug grins off their faces...............

By way of anecdote, I am spending a few days in the Guildford area and peered into quite a few EA windows on Saturday. Empty. Not a single customer registering their interest or looking through the details of properties. EAs had the usual bored look with the tell-tale hollow expressionless eyes that say: I need to find another job as this is just going to get worse.

As for the US market, Al's oberservatoion that the "froth" markets are going to see some pain is coming true. I have a sister-in-law trying to sell their townhouse in the DC area and its been on for about 5 months and has one offer which is based on that person trying to do the same thing: sell in a collapsing market. They have gone ahead and bought another property in the Phoenix area and that is probably the most crash prone market in the US next to California. I haven't said a word but it shows how people do not read anything and are blinded by the hype.

More from the US--the once searingly hot VA market (near DC):

http://www.builderonline.com/industry-news...rticleID=348140

Inventory of Unoccupied Houses Rising

Source: Richmond Times-Dispatch
Publication date: 2006-08-12
By Carol Hazard, Richmond Times-Dispatch, Va.
Aug. 12--Thinking about building a house on speculation in Richmond in the $225,000 to $325,000 range?
You might want to rethink.
The inventory in that price range is rising, according to research provided by Roper Brothers Lumber Co. in Petersburg.
If the forecast gets worse -- as it could in this cooling housing market -- forget it.
Houses in that price range would move from orange alert,
meaning expanding risk, to
red
-- a level of risk that needs serious attention.

http://www.builderonline.com/industry-news...rticleID=348164

Homebuilders Bolster Sales With Freebies: Incentives Aim to Keep Inventories in Check
Source: The Dallas Morning News
Publication date: 2006-08-12
By Steve Brown, The Dallas Morning News
Aug. 12--When Fox & Jacobs recently decided it was time to move some houses, the Dallas-based homebuilder knew just how to catch women's attention.
It offered a year's free maid service with the purchase of one of its North Texas houses.
"They are trying to move units, and they have been on a marketing blitz."
And with good reason. While new-home sales in North Texas are still at record levels, the number of unsold houses is also soaring. Almost 10,000 unsold new homes were on the market at the end of June.

Coming soon to your area:

Great Crash 2

Revenge of the FTBs

"Its too late to sell now" (Wuuuuuh huuuh huuh huh huh HAH :ph34r: )

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On radio 5 last night/this morning about 1:30 am there was an interview with an American and said briefly about the the housing market coming down 30-40% in some states in just a a few weeks, and said that people were not buying at all and waiting for it to come down more.

Love it if it happened here that quick and now..

lets hope

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On radio 5 last night/this morning about 1:30 am there was an interview with an American and said briefly about the the housing market coming down 30-40% in some states in just a a few weeks, and said that people were not buying at all and waiting for it to come down more.

Love it if it happened here that quick and now..

lets hope

The lag has historically been 6 months. The Great Crash began in California in early 1989 and hit here in late Autumn. This time around we should start to see forests of for sale signs about November--just in time for Christmas. :)

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Volumes are down - Prices aren't

New York Times

Prices are down on the West Coast. First YoY negative hit in July for the bellweather San Diego market.

http://www.dqnews.com/RRSCA0806.shtm

San Diego Sales YoY: 4,765 3,370 -29.3% Median YoY $496K $487K -1.8%

As sales plummet sellers will eventually lower prices. Anecdotal evidence shows discounts are much higher than the 1.8% YoY drop suggests.

Auction sales will soon gather pace as foreclosure activity starts to rise:

http://www.dqnews.com/RRFor0806.shtm

California Foreclosure Activity Hits Three-Year High
August 2, 2006
La Jolla, CA.——Second quarter California foreclosure activity rose at the fastest pace in at least 14 years, the result of waning home price appreciation.
Lenders sent 20,752 default notices to homeowners statewide during the April-through-June period. That was up 10.5 percent from 18,778 the previous quarter and up 67.2 percent from 12,408 in the second quarter of last year, DataQuick Information Systems reported. Last quarter's year-over-year increase was the highest for any quarter since DataQuick began tracking defaults in 1992.

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More good news from once hot AZ market--free golf memberships etc:

http://www.telegraph.co.uk/money/main.jhtm...6/cchouse16.xml

America's property downturn hits home

By David Litterick in New York

(Filed: 16/08/2006)

In the deserts around Las Vegas and Phoenix, the temperatures may be scorching, but in the offices of Wagner Homes, the climate is decidedly cool. It's not the air conditioning either - where once the fervour for new homes was at record levels, now salesmen sit twiddling their thumbs, dreaming up ever more radical ways to shift their homes.
advertisement
Las Vegas and Phoenix have been among the hottest markets in recent years, with prices surging by nearly 16pc last year. This year, the picture has been rather different. Prices are flat, sales are sliding and developers are as desperate to sell off land as they were to buy it just five years ago.
Home builders have been forced to pull out all the stops to keep business going. Traditionally, they may have been happy to throw in a washing machine, refrigerator or tumble dryer to secure a sale. Today, it takes rather more expensive items to lure buyers and anything less than a pool won't do.
"We had three homes sitting on the block for six months without a buyer," Wagner's LaRae Obenauf said. "Within the past two months, we threw in the pool and we saw a big increase in interest." All three have now been sold.
Some incentives are worth more than $50,000 (£26,000), according to Larry Murphy of research group SalesTraq. "Swimming pools, golf club memberships, home landscaping, all of them are being offered. "Home builders lower prices only as a last resort, and so prior to that they prefer to give incentives," he said.
It's not just in Arizona and Nevada where the market is cooling, previous hot spots such as Florida, California and New York are all showing signs of stagnating, to the concern of economists. When the technology-fuelled boom of the late 1990s turned to dust, it was largely the consumer that picked up the slack, and much of that was down to a booming housing market. Double-digit price appreciation made owners feel wealthy and secure in their spending.

This is how many builders are masking price declines. A $50k pool doesn't show up in the sold price. Thus a $300k home is really selling for $250k. But to publish a decline in price of that amount would cause a panic and rush for the exits.

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Prices are down on the West Coast. First YoY negative hit in July for the bellweather San Diego market.

http://www.dqnews.com/RRSCA0806.shtm

San Diego Sales YoY: 4,765 3,370 -29.3% Median YoY $496K $487K -1.8%

An extremely selective edit - what about all the other positive areas?

Can't Sell - Won't Sell as is happening here. If prices cant be achieved properties will be withdrawn - pushing prices up - supply and demand

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In Florida prices are dropping across the board. There are so many properties on the market that have been reduced in price 4 or 5 times and still no interest. If you need to sell and many need to sell due to the vast cost of owning property in Florida (even without a mortgage), the only way you can get interest is reduce the price substantialy. Many top Real Estate Agents are openly saying you can get deals 20 to 25% low than at the Sept 2005 peak. This thing has only just begun there are Billions of $ of adjustable rate mortgages due to go up fron 2 or 3% intoductory rates to 6, 7 or 8% in the comming month, the repos will come in their tens of thousands, 2001 prices will be here again in Florida.

Pablo Silver or Lead?

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In a free country like the US, there was a shortage of houses and then they built a lot of houses. This is leading to falling prices.

I'm not sure how this helps those of us who are suffering under socialist rule?

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Guest Cletus VanDamme

The crash is becoming so pervasive that even the Realtors are no longer trying to spin the news. The situation on the ground is simply too terrible to call it any other way than it is: the start of another Great Crash:

Great Crash 2

:blink::o:unsure::(:blink::o

Could never happen here ;) LOL

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I have a sister-in-law trying to sell their townhouse in the DC area...

So you have a brother or a sister trying to sell in DC?

I haven't said a word but it shows how people do not read anything and are blinded by the hype.

You haven't said a word, and they are your sister/brother?

Edited by The Colour

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So you have a brother or a sister trying to sell in DC?

You haven't said a word, and they are your sister/brother?

My wife's sister! You don't know the full story--these are "experts" in real estate and don't take kindly to advice. I did, in fact, send them a copy of the bad news on AZ and they emailed back to say they have pulled out of buying but for reasons other than the market is crashing. Yeah right. <_< Its amazing but some people are actually clueless and belief house prices don't drop or that its different this time.

Their townhouse is still for sale in the DC area and the latest from that region is almost as bad as the AZ market--rising inventories and buyers waiting on the sidelines like hungry vultures.

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In a free country like the US, there was a shortage of houses and then they built a lot of houses. This is leading to falling prices.

I'm not sure how this helps those of us who are suffering under socialist rule?

Tony Blair is the last person I would describe as a socialist. It is the rampant excesses of free market capitalism that have led to such imbalances in the first place.

There has been a lack of positive feedback.

Edited by Caledonian-Emigre

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We´re not all communists over here in Europe. Just because we are not Neo-Con rednecks does not make us all control-freak Stalinists to be hunted out in a McCarthy witch hunt.

Tony Blair is the last person I would describe as a socialist.

And how free are you exactly in the US after the infamous "Patriot Act" ?

Free to build houses. Obviously, we can't speak out of turn or play chess without the government's permission (and the chess thing was pre patriot act), but that's hardly relevant to the price of houses.

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there was an interview with an American and said briefly about the the housing market coming down 30-40% in some states in just a a few weeks, and said that people were not buying at all and waiting for it to come down more.

If this drop is real, probably most of these 'people' (those that do not have property presently) are not in a position to buy even after these reductions and/or they are far too nervous to buy into a bear market.

Many of these guys will end up buying on the way up or not at all, even tho they will have plenty of time to buy at the lows.

Just human nature...

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Big figures - it's going to make property over there look so cheap in another year or two if the £ is still near 2$.

The £ will be more than $2 in 2 or 3 years and 5 bedders with pools in Florida will be £80k. ;)

Good holiday rental? Particularly as more Brits will holiday there than Med as EUR will be strong v STG

fp

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  • 302 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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