I love the posts on this site. This posting has some very good 'big picture' graphs.
Posted on Oct 27th, 2006
David Andrew Taylor
I wrote something yesterday on how existing homes sales were showing signs of slowing, yet overall is a weak indicator. However, it does add to the overall picture in the housing market.
I got a comment from Jed, a commenter who's shown that he's got more than just a basic understanding of the economy. His comment was that, overall, the housing market was slowing down. Very true. He brought attention to seasonal adjustments that would in fact lower the overall existing homes sales picture. I've not actually seen the document he's referenced, but it made sense. I got the sense that if we were to seasonally adjust the data, the picture would look a little more bleak for existing homes sales. Again, however, I defer to my opinion on existing homes sales, that as the economy goes, it's not all the big of a deal what happens in this arena. I'm more concerned with construction spending and new homes purchases/builds.
Saturday, October 28, 2006
Monday, October 23, 2006
Reflexive Changes in Real Estate
Posted on Oct 23, 2006 by the editor of Seeking Alpha
While much has been written about the housing market recently, it is Paul McCulley's PIMCO October Piece that had some key insights into price momentum. It is a very important point that the housing market is "reflexive" -- to use the term that George Soros coined.
That is, increases or decreases in prices are based upon expectations for the future, not necessarily on fundamental reasons like percentage of income devoted to mortgage, interest rates, scarcity of land. If people "think" that prices would go higher, that will justify paying more than the intrinsic value. The exact same can be the case when and if people "think" that real estate is not a good storage of value.
Think of the NASDAQ bubble and the justification for Amazon (AMZN) or Cisco (CSCO) at 3-4x current share prices. In hindsight we can see that prices were ahead of the fundamental reasons for owning those stocks. However, because enough people thought the price appreciation would continue, the price traded as high as it did. Reflexivity made the price the level that it traded.
Read more >>
While much has been written about the housing market recently, it is Paul McCulley's PIMCO October Piece that had some key insights into price momentum. It is a very important point that the housing market is "reflexive" -- to use the term that George Soros coined.
That is, increases or decreases in prices are based upon expectations for the future, not necessarily on fundamental reasons like percentage of income devoted to mortgage, interest rates, scarcity of land. If people "think" that prices would go higher, that will justify paying more than the intrinsic value. The exact same can be the case when and if people "think" that real estate is not a good storage of value.
Think of the NASDAQ bubble and the justification for Amazon (AMZN) or Cisco (CSCO) at 3-4x current share prices. In hindsight we can see that prices were ahead of the fundamental reasons for owning those stocks. However, because enough people thought the price appreciation would continue, the price traded as high as it did. Reflexivity made the price the level that it traded.
Read more >>
Saturday, October 21, 2006
Arizona ranked fourth for new jobs totals
The Business Journal of Phoenix - 1:44 PM MST Friday
Arizona added 119,200 jobs between over the last 12 months and 5,500 new jobs between August and September of this year, according to new numbers from the U.S. Bureau of Labor Statistics.
Those year-over-year jobs numbers rank fourth in the U.S. behind only Florida, Texas and California. Those states have far larger populations than Arizona.
Read more >>
Arizona added 119,200 jobs between over the last 12 months and 5,500 new jobs between August and September of this year, according to new numbers from the U.S. Bureau of Labor Statistics.
Those year-over-year jobs numbers rank fourth in the U.S. behind only Florida, Texas and California. Those states have far larger populations than Arizona.
Read more >>
Sunday, October 15, 2006
Sellers stuck with real estate slowdown
By Ed Gately, Tribune
October 11, 2006
Craig and Shannon Bohall bought an existing home in Mesa three years ago, and now they have an opportunity to move up to their first brand new home. Their house, near Baseline Road and Val Vista Drive, has five bedrooms, 3 1 /2 bathrooms and lots of amenities. They put their house on the market more than a month ago in hopes of a quick sale so they can close on their new home by mid-November.
However, the house hasn’t budged. It’s just sitting on the market day after day without drawing any buyer interest. The couple already has cut their asking price from $564,995 to $559,995.
“It’s depressing and frustrating because I probably am like 20,000 other people out there,” Craig Bohall said. “You have a beautiful home, there’s nothing wrong with it, but there just aren’t any buyers. And I realize that if I put a beautiful home on the market just like about 20,000 other people, and it’s not going to sell, why would anybody come look at mine just because it’s nice?”
The Bohalls have sweetened the deal by offering a free trip to Hawaii, a free big-screen TV and $10,000 cash to whoever steps forward and buys their house.
Read more >>
October 11, 2006
Craig and Shannon Bohall bought an existing home in Mesa three years ago, and now they have an opportunity to move up to their first brand new home. Their house, near Baseline Road and Val Vista Drive, has five bedrooms, 3 1 /2 bathrooms and lots of amenities. They put their house on the market more than a month ago in hopes of a quick sale so they can close on their new home by mid-November.
However, the house hasn’t budged. It’s just sitting on the market day after day without drawing any buyer interest. The couple already has cut their asking price from $564,995 to $559,995.
“It’s depressing and frustrating because I probably am like 20,000 other people out there,” Craig Bohall said. “You have a beautiful home, there’s nothing wrong with it, but there just aren’t any buyers. And I realize that if I put a beautiful home on the market just like about 20,000 other people, and it’s not going to sell, why would anybody come look at mine just because it’s nice?”
The Bohalls have sweetened the deal by offering a free trip to Hawaii, a free big-screen TV and $10,000 cash to whoever steps forward and buys their house.
Read more >>
To sell that house, pretend you're on first date
This is great advice for Sellers in Denver and anywhere inventory exceeds six months time...
By John Rebchook, Rocky Mountain News October 14, 2006
... "Things are tough, and everyone knows that," Fritzel said. "You have to think outside of the box."
Fritzel recently had Morton's Steak House cater a meal for 35 to 40 brokers at the house in Cherry Creek North, a residence with almost 6,000 square feet, including the 1,783-square-foot basement.
"I had all of the heavy hitters," he said.
Liz Richards, a broker with Leonard Leonard & Associates, compares selling a home to going on a first date.
"Getting a house ready for the open market is much like getting oneself ready to date after a hiatus from singledom," Richards wrote in a recent newsletter. "You've been there and you know what I'm talking about. When you aren't on the market, either as a home or person, nine times out of 10 you get a bit relaxed about the details because you are not in competition mode. And competition is, especially in this market, of hideous abundance (I'm talking homes here)."
Read more >>
By John Rebchook, Rocky Mountain News October 14, 2006
... "Things are tough, and everyone knows that," Fritzel said. "You have to think outside of the box."
Fritzel recently had Morton's Steak House cater a meal for 35 to 40 brokers at the house in Cherry Creek North, a residence with almost 6,000 square feet, including the 1,783-square-foot basement.
"I had all of the heavy hitters," he said.
Liz Richards, a broker with Leonard Leonard & Associates, compares selling a home to going on a first date.
"Getting a house ready for the open market is much like getting oneself ready to date after a hiatus from singledom," Richards wrote in a recent newsletter. "You've been there and you know what I'm talking about. When you aren't on the market, either as a home or person, nine times out of 10 you get a bit relaxed about the details because you are not in competition mode. And competition is, especially in this market, of hideous abundance (I'm talking homes here)."
Read more >>
Friday, October 13, 2006
Median price of Phoenix-area home drops for 1st time in a decade
PHOENIX -- The median price for a resale home in metropolitan Phoenix fell in September for the first time in a decade, another sign that the region's housing market continues to slow.
Only half the number of homes sold last month as the same month a year earlier, according to a monthly report by the Arizona Real Estate Center at Arizona State University Polytechnic. Just 4,875 homes sold in the month, down from 9,815 a year earlier. That's the lowest monthly total since February, 2003.
"A lot of it is the buyers aren't out there," said Jay Butler, director of the Arizona Real Estate Center. "The days of the big (price) increases are gone, at least for a while, so the buyer is very cautious about what they're going to do."
Read more >>
Only half the number of homes sold last month as the same month a year earlier, according to a monthly report by the Arizona Real Estate Center at Arizona State University Polytechnic. Just 4,875 homes sold in the month, down from 9,815 a year earlier. That's the lowest monthly total since February, 2003.
"A lot of it is the buyers aren't out there," said Jay Butler, director of the Arizona Real Estate Center. "The days of the big (price) increases are gone, at least for a while, so the buyer is very cautious about what they're going to do."
Read more >>
Wednesday, October 11, 2006
Greater Phoenix resale market continues slowing trend in September
East College at Arizona State University's Polytechnic
Tuesday, October 10, 2006
MESA, Ariz. - In September 2005, the local resale home market began to slow down with 9,815 recorded sales leading to 4,875 recorded sales in September 2006. This is the lowest monthly level since 4,090 sales were reported in February 2003, and the lowest September since 2000, with 4,134 sales. So far in 2006, there have been a total of 52,390 sales, while it stood at 88,750 sales in 2005 year to date. While it was very unlikely that the market could have sustained the level of 2005, the current level of activity is very comparable to that recorded in the years of 2003 year to date, with 55,435 sales.
For the first time in the last 10 years, the year-to-year median home price has declined from last year's $263,000 to $256,900, while it was $264,900 in July 2006. The record to date was June 2006 at $267,000.
For September 2006, 14 percent of all recorded sales were for homes priced from $125,000 to $199,999, 46 percent for $200,000 to $299,999 and 37 percent for homes priced over $300,000. Last year, the distribution of all recorded sales was 29 percent for homes priced from $125,000 to $199,999, 34 percent for $200,000 to $299,999 and 32 percent for homes priced over $300,000.
Read more >>
Tuesday, October 10, 2006
MESA, Ariz. - In September 2005, the local resale home market began to slow down with 9,815 recorded sales leading to 4,875 recorded sales in September 2006. This is the lowest monthly level since 4,090 sales were reported in February 2003, and the lowest September since 2000, with 4,134 sales. So far in 2006, there have been a total of 52,390 sales, while it stood at 88,750 sales in 2005 year to date. While it was very unlikely that the market could have sustained the level of 2005, the current level of activity is very comparable to that recorded in the years of 2003 year to date, with 55,435 sales.
For the first time in the last 10 years, the year-to-year median home price has declined from last year's $263,000 to $256,900, while it was $264,900 in July 2006. The record to date was June 2006 at $267,000.
For September 2006, 14 percent of all recorded sales were for homes priced from $125,000 to $199,999, 46 percent for $200,000 to $299,999 and 37 percent for homes priced over $300,000. Last year, the distribution of all recorded sales was 29 percent for homes priced from $125,000 to $199,999, 34 percent for $200,000 to $299,999 and 32 percent for homes priced over $300,000.
Read more >>
Buyers, sellers skittish over falling home prices
Glen Creno
The Arizona Republic
Oct. 10, 2006 07:20 PM
The Valley's resale housing market continued to slow in September as the market struggled to find a bottom.
The number of houses sold fell and, for the first time in a decade, the median price was down from the same time last year, according to the latest resale report by the Arizona Real Estate Center at Arizona State University Polytechnic.
Prices have bounced around from month to month as the market recovers from the buying frenzy fueled by investors and speculators. But it's the first time in 10 years that the price dropped when compared with the previous year. The latest median resale home price in the Valley is $256,900.
Read more >>
The Arizona Republic
Oct. 10, 2006 07:20 PM
The Valley's resale housing market continued to slow in September as the market struggled to find a bottom.
The number of houses sold fell and, for the first time in a decade, the median price was down from the same time last year, according to the latest resale report by the Arizona Real Estate Center at Arizona State University Polytechnic.
Prices have bounced around from month to month as the market recovers from the buying frenzy fueled by investors and speculators. But it's the first time in 10 years that the price dropped when compared with the previous year. The latest median resale home price in the Valley is $256,900.
Read more >>
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