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New home sales drop! Bubble???

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Bemis Pownall

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http://biz.yahoo.com/rb/030227/economy_homes_2.html



Reuters
New Home Sales Drop 15.1 Pct. in January
Thursday February 27, 10:07 am ET


WASHINGTON (Reuters) - Purchases of new homes dipped to their lowest level in a year in January, the government said on Thursday, a surprisingly weak showing that may raise concerns the recent strength in the housing market could be running its course.
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The Commerce Department said new home sales fell to a seasonally adjusted 914,000 unit annual rate in January, the slowest pace since January 2002. The percentage drop, at 15.1 percent, was the biggest one-month decline in nine years.

While analysts had been expecting sales to dip from the record pace seen in December, which was revised to a 1.077 million unit annual rate, the size of the decline was much larger than had been expected. The average forecast of economists polled by Reuters had called for a 1.043 million annual rate.

In the geographical breakdown, three of the four regions saw declines in sales. The number of homes for sale at the end of the month, at 346,000, stood at the highest since July 1996. That drove the supply of new homes for sale to 4.5 month's worth from 3.8 months in December.
 

Mike Garrett RAA

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Certified Residential Appraiser
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Colorado
Greenspan says "highly unlikely".

Last month numbers were higher than expected and a new record for December...go figure!
 
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Bemis Pownall

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http://www.denverpost.com/Stories/0,1413,3...l?search=filter





Home prices decline for 1st time since '90
Metro-area drop may signal housing slide
By Kristi Arellano
Denver Post Business Writer

Thursday, February 27, 2003 - Metro-area home prices in February slipped more than $2,200 from their year-ago level, marking the first time since 1990 that the average home price recorded a yearly decline.
The dip gives more weight to worries that the metro-area housing market is headed for a downturn.

"This casts a focus on one of my big concerns, which is whether home values are going to hold up," said Tucker Hart Adams, a regional economist for U.S. Bank.

"Consumers have seen huge losses in their stock portfolios, and the only thing that's kept net worth from declining is the increase in home prices.

" If housing prices go down, that is the nail in the coffin of consumer confidence," Adams said.

Yet Adams and other experts aren't ready to call February's price drop a sure sign that Denver's housing market is headed downhill.

A decline in homes prices is troubling for sellers, but it would be welcome news for buyers priced out of the market by fast-rising values in the 1990s.

The average price of a single-family home was $263,209 in February, down 0.8 percent from $265,451 a year ago, according to a pair of reports issued Wednesday.

The median price - often considered a more accurate gauge of the market - eked out a 1.4 percent gain over last year. The median represents the midpoint, with half the prices above it and half below.

The information, compiled by Coldwell Banker Residential Brokerage and Jerry and Steve McGuire of Re/Max Professionals Inc., is based on data from Metrolist Inc., the area's Multiple Listing Service.

A single month of data isn't enough to gauge the direction of the market, Adams said.

"One number does not make a trend, but this is one more piece of evidence pointing to a trend," Adams said. "It's another thing to be concerned about."

Some brokers attributed the dip to a slowdown in high-end sales - not an across-the-board price drop.

"Prices aren't coming down dramatically, but the homes that are selling more right now are the lower-priced ones," said Kate Rossi, president of Coldwell Banker in Colorado.

Steve McGuire, a broker associate with Re/Max Professionals, said that high-end home sales have flattened but that the market for homes and condos priced below $250,000 has remained strong.

Sellers with homes priced lower than $250,000 are still confident they won't have to take a loss.

Sara DeLuca and her husband, James, still haven't sold their Curtis Park home, which they put on the market in October.

"We knew that the market was slower and that we were taking a chance, but we didn't have any expectations of when it would sell," Sara DeLuca said.

The couple want to move to a larger house to accommodate their growing family, but they're not in a hurry.

"We haven't really looked for another house because we didn't want to put ourselves in a situation where we would be forced to lower the price," she said.

Their two-bedroom Victorian is listed for $199,900.

"It's a good price and a popular neighborhood, so we think our chances are pretty good," she said.

But some sellers of higher- priced homes are growing frustrated that they can't sell.

Mike and Shirley Pulciani have had their home outside of Parker on the market for more than a year. The 5-acre property, which includes a barn and horse arenas, is in near-perfect condition, Mike Pulciani said.

He and Shirley want to move to Meeker now that they're retired. Their three-bedroom home is listed at $399,000.

"It's a steal," he said. "If I was selling two years ago, I wouldn't have talked to you for less than half a million. I'm taking a loss if I sell now."

Buyers are in a better position to negotiate because so many homes are on the market.

Brokers listed 22,989 homes for sale in February. That was up 33 percent from February 2002 but down from the record 23,769 homes for sale in October.

The number of homes and condos under contract was down 7.7 percent from last year. The 2,423 homes under contract is the lowest recorded for February since 1995, when interest rates were around 8.5 percent.

Housing experts said today's interest rates are enticing first-time buyers into the market, fueling the demand for lower-priced homes. Mortgage rates last week reached a new low, averaging 5.8 percent, with 0.6 points for a 30-year, fixed- rate loan.

The average condo price was up 2.1 percent while the median climbed 4.2 percent, according to the reports.

The last time single-family home prices fell from the previous year was February 1990, said Gary Bauer, an independent real estate broker and consultant who tracks Denver's housing market.

He is predicting that Denver's resale housing market will struggle as long as there's a possibility of war with Iraq. Political and economic uncertainty often lead people to postpone big purchases, he said.

"We're going to see adjustments on a monthly basis because people are concerned about what's going to happen," he said.


:icecream:
 

Dee Dee

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Bemis,

Ha! It's about time! :evil:

What I've been trying to tell mortgage and real estate brokers, as well as homeowners for at least a year is finally, FINALLY, being acknowledged in the mainstream media.

Don't ya know...I'm the 'pessimist' appraiser, the 'doomsday Chicken Little' who wasn't buying into what the majority wanted me to believe, and I was one of the very few appraisers in my area that adjusted their reports to reflect the changes that I was seeing....NOT the spoonfed crap that the 'experts' were trying to shove down my throat.

H*lluva lot of good it did me. Lost a sizable number of my clients because I wouldn't push the numbers by refusing to use anything more than the most recent comp sales and analyzing what the active listings were indicating. Think they'll come crawling back, apologizing and telling me that I was right all along? Pfffffffffffftttt! Yeah....right.

I can't tell you how many homeowners are now upside-down on their mortgages or are finding that they can't sell for what they paid for their homes if they bought after 2001 or so. Every one of them chose to believe the mainstream statistics and the optimistic forecasts of the 'experts'.

Don't ya just love how they're now blaming the 'uncertainties of war' for the market decline? Isn't that convenient :evil: . Whatta bunch of jack*sses!

Brace yourself, Bemis, I think we're in for a long haul before there will be recovery.
 
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