Housing Bubble Bursting?

[Terrel L. Shields]

Rog

We are just a bigger community that we were in the 60's - 80's when Walmart growth exploded and Tyson foods expanded. This same thing happened in the early 70's when I was laid off from a developer; in the late 70's when the interest rates crunched us...mid 80's when the S & L crisis came home to roost. We had a very mild downturn along about 95' hardly noticable..so for most local builders they have no memory of any of it. 40 yr old developers were 20 yr old when the last significant one hit...and the bulk of these carpenters turned developers thought the building would never stop...it stopped so suddenly a new name surfaces every week in the bankruptcies or a lawsuit or lien...Material Liens have pretty much more than doubled in the past 6 mo.

 

[JSmith43]

so for most local builders they have no memory of any of it. 40 yr old developers were 20 yr old when the last significant one hit...and the bulk of these carpenters turned developers thought the building would never stop.

Well, that explains the enhanced local effects! It probably wasn't as dramatic when they read about such stuff in their economics history text books.... ...you mean they didn't teach that stuff to future carpenters and builders?

The upside is that many survivors will act prudently the rest of their lives

 

[Randolph Kinney]

Brad,

Here is the link to the current NAR data:

http://www.realtor.org/Research.nsf/files/EHSreport.pdf/$FILE/EHSreport.pdf

But, the preliminary number from the midwest showed a decline of 4.*% - the largest drop in the country. That drop was caused mostly by MI, OH, and IN so not surprised that Roger has not seen a problem in MN.

Maybe I don't know how to read the NAR chart but it said the South produced a change of -7.0% median price year over year. The Midwest drop was -1.2%. Is that a mistake? It also shows the Northeast dropped -5.2%. The West shows the least drop with -0.6%.

Still, only 3.5% overall? Looks like a classic- and minor, if Greenspan and others are correct about us being at the bottom of the curve- correction.

I suppose it could be minor and the bottom is near however, the curve shows an acceleration (change in slope, more negative) of price decline year over year.

Here is the graph from Haver Analytic of just the SFR without condos, it appears to show no bottom to me:

If you graph the combined median price change of condos and SFR, the trend looks worse. Here is the NAR data separated for SFR and condos:

http://www.realtor.org/Research.nsf/files/totalsalesreport.pdf/$FILE/totalsalesreport.pdf

Looking at the graph and NAR data, we don't have a bad economy yet, so why is the data and trend so negative?

It will be interesting to see the next NAR published data for November to see if the bottom can be claimed to have been reached!

 

[Randolph Kinney]

October's new-homes sales off 3.2%

http://www.marketwatch.com/News/Story/Story.aspx?siteid=mktw&guid={188B79B4-D78F-472C-AF9D-13A677C2F87A}&dist=bnb

October's new-homes sales off 3.2%
Median sales prices up 2% in the past year

Median sales prices were up 2% in the past 12 months to $248,500, reversing a trend toward falling prices year over year. Sales of houses priced less than $200,000 decreased by 16%.

Home builders have piled on incentives, including offering free vacations and new cars, to sell homes and work off inventories. Such incentives are not subtracted from the sales price reported to the government.

Sales are reported when a contract is signed, not at the closing of the sale. Home builders have reported a large increase in cancellations in recent months. Cancellations are not reflected in the government data, so the reported sales are likely overstated.

The government cautions that its housing data are subject to large sampling and other statistical errors. Large revisions are common, and it can take up to six months for a trend in sales to emerge.

Over the past six months, new-home sales have averaged 1.05 million per month, as opposed to 1.10 million for the comparable period running through September. The six-month sales average is now down 19% from December.

 

[john snyder]

This morning on the Today show there were two examples of the Today show
and Oprah each help stage a house for sale and neither sold. One is still ont he market and one is leased with option.

Krikey if Oprah can't sell the home????

How about increasing the term to 40-60 years?

john

 

[murray stroupe]

Re

http://www.marketwatch.com/News/Story/Story.aspx?siteid=mktw&guid={188B79B4-D78F-472C-AF9D-13A677C2F87A}&dist=bnb

October's new-homes sales off 3.2%
Median sales prices up 2% in the past year

Median sales prices were up 2% in the past 12 months to $248,500, reversing a trend toward falling prices year over year. Sales of houses priced less than $200,000 decreased by 16%.

Home builders have piled on incentives, including offering free vacations and new cars, to sell homes and work off inventories. Such incentives are not subtracted from the sales price reported to the government.

Sales are reported when a contract is signed, not at the closing of the sale. Home builders have reported a large increase in cancellations in recent months.

Over the past six months, new-home sales have averaged 1.05 million per month, as opposed to 1.10 million for the comparable period running through September. The six-month sales average is now down 19% from December.

===================================
Randolf K.;


investors.com reported sales up also[existing homes i believe];
but median prices DOWN 3.5% verses a year ago.11-29-06/USA average
===================
And median asking prices of Memphis TN/surrounding area homes =$168,900;
down - 0.1% for 6 months;
up + 5.6% 12 months

 

[Randolph Kinney]

Housing futures expect continued slump

Since the CME now trades futures based on the S&P/Case-Shiller home price indices, we looked to see what the February, May and August 2007 futures are forecasting.


The table below shows the expected percent change in single family home prices in the ten cities that Case-Shiller tracks as well as a composite for the entire country. The change is calculated from the most recent September actual data (the data lags two months) to the 2007 months when the futures contracts expire.

 

[Dee Dee]

http://www.bloomberg.com/apps/news?pid=20601103&sid=aJpnPI7qhPck&refer=news

Dec. 1 (Bloomberg) -- The mortgage bond market is beginning to buckle under the weight of the worst U.S. housing slump in six years.

 

[moh malekpour]

http://www.bloomberg.com/apps/news?pid=20601103&sid=ajcm9waqkTio&refer=us
U.S. Construction Spending Fell 1% in October, Led by Housing
Dec. 1 (Bloomberg) -- Construction spending in the U.S. fell by the most in five years in October, led by a plunge in home- building, a government report showed.

Spending fell 1 percent, more than forecast, following a 0.8 percent drop in September that was larger than originally reported, the Commerce Department said today in Washington. Spending on private residential construction fell for a seventh straight month.

Builders such as Toll Brothers Inc. are cutting back on projects as demand for new homes wanes and are offering incentives to reduce inventories. Federal Reserve Chairman Ben S. Bernanke said this week that residential construction is likely to be a drag on economic growth into next year.

 

[moh malekpour]

http://biz.yahoo.com/rb/061130/hrblock_results.html?.v=3
H&R Block loss nearly doubles on mortgage weakness
NEW YORK (Reuters) - H&R Block Inc. (NYSE:HRB - News), the largest U.S. tax preparer, on Thursday said its quarterly loss nearly doubled, and was larger than analysts expected, as the struggles of its mortgage lending arm worsened