Housing Market Tracker - Signs of House Inventory Absorption?

Quote of the Day

"We are way early in the curve in terms of the devastation to housing." - Manhattan appraiser Jonathan Miller, executive VP at Radar Logic, a real estate data firm. (Newsday, Feb. 11th)

Real Estate Sales and House Prices

California: "Insiders See Signs Of New Life In Real Estate Market Locally. "Evan as local home prices continued falling in December, sales may be starting to pick up... The median home price in Vallejo dropped about 21% in December over December 2006, said Solano Association of Realtors president Lori Collins. Benicia's median home prices [also] fell... about 54%, she said... Collins and Alan Schwartzman of Benicia's Advance Mortgage. "We are seeing more buyers out there, and they're making offers... We took some buyers around recently, and at least two properties had multiple offers... There seems to be an upward trend in buyer activity." (Times Herald Online, Feb. 11th)

Home Prices Will Drop For 2 More Years, Experts Predict. "Martin Cantor of Dowling College: Home prices on Long Island, which have fallen by 5% in Nassau County and 7% in Suffolk over the past year, could drop another 15%... Irwin Kellner, chief economist with North Fork Bank and Marketwatch.com: As of December, Nassau's median home price of $447,500 was 5.6 times the median household income in the county, while Suffolk's $370,000 median price was 5.2 times income... Nationally, median home prices are, on average, 3.2 times median household income... To get to a point where prices are four times incomes, median home prices would have to fall 24% in Suffolk and 29% in Nassau." (Newsday, Feb. 11th)

Deal Or No Deal? Sticker Shock In Yakima Valley Housing. "While overall home prices are appreciating, Yakima's real estate market has some pockets of weakness. Mid-range home prices and sales are slowing. Lower-priced homes, up to about $200,000, are selling rapidly... Despite rising inventories and home sales in a seasonal slowdown, sales prices continue to rise. The average selling price of a home in Yakima County rose... by $11,000 to more than $163,400 between the end of 2006 and the end of 2007, even as total residential sales slowed by nearly 7%... Office of Federal Housing Enterprise Oversight: For the last five-year period Yakima's housing price appreciation rate... was 37.9%." (Yakima Herald, Feb. 11th)

Don't Blame Subprimes. "The real problem is affordability... Forty years ago, the median national price of a house was about twice the median household income... Twenty years ago... about three times income. In the past [decade], it jumped to four times income. [Now,] try to find a single-family home in the D.C. area for the national median of $221,900... Today the median price of an existing home in Silicon Valley is $775,000, but the median household income there is only $62,020. A home in the area costs almost 13 times annual income. Home prices in that market would have to drop nearly 70% or income would have to triple, and interest rates would have to stay low for the price-to-income ratio to reach a more affordable level." (Washington Post, Feb. 11th)

Van Wagenen: Slowly But Surely, Home Inventory Being Absorbed. Texas: Lubbock Land Co. year-end single-family housing survey: The 879 homes permitted in 2007 are right on target when compared to the city's historical average of 800-900 starts a year... LL Co. company President Charlie Hamilton ... expects builders to permit somewhere from 850-900 new homes in 2008... Permit activity was off 21%, [but] a number of those unsold homes were built by the likes of D.R. Horton (DHI) and Choice Homes Inc., which have since left the market.... Completed-but-unsold inventory in all price ranges fell 19% from 168 to 136 as of Dec. 31." (Lubbock Online, Feb. 10th)

A Grand Departure. "The fading of the grand foyer, central Ohio builders say, is part of an overall trend of making better use of space in new homes rather than continuing to make them bigger... [But still,] the National Association of Home Builders says the average American house increased in size from about 1,500-sf in 1970 to more than 2,300-sf in 2001... Although such explosive growth slowed to a crawl in the early part of the 21st century -- to 2,459-sf in 2006." (Columbus Dispatch, Feb. 10th)

Daughter Adds To Builder's Troubles As She Walks Away From Condo Deal. "Florida Association of Realtors in Orlando: The number of homes sold by Realtors in Florida fell 29% last year from 2006, while the median price for an existing single-family home in the state was $208,900 in December, down 13% from a year earlier... Toll Brothers (TOL) said its cancellation rate in Florida was almost 61% during the fiscal 2007, up from 28% in fiscal 2006. "In the luxury market, the cancellations are being driven by continued negative sentiment toward the real-estate market as well as difficulties in selling your existing home," said Anna Torma, an analyst at Soleil Securities." (Seattle Times, Feb. 9th)

Incentives Abound To Lure Home Buyers. "Builders across North Texas are trimming prices on new homes, throwing in freebies and offering bonuses to real estate agents to make sales. Meanwhile, mortgage rates have been falling in recent weeks, making homes more affordable... Builders are cutting deals to work through the surplus. There were 10,131 finished, unsold homes in North Texas at the end of 2007, according to Metrostudy. That was down 16% from 12,055 at the end of 2006. David Brown, Dallas-Fort Worth director for Metrostudy: The builders should be closer to 6,000-7,000." (Star Telegram, Feb. 9th)

Pending Home Sales Plummet 24.2%. "The housing market continues to spiral downward, with softness in sales and prices. As of now, the worst housing slump in 25 years is likely to continue this year, and quite likely beyond that. The National Association of Realtors' index of signed purchase agreements fell 1.5% to 85.9 for December 2007. The drop in pending sales in November 2007 was revised downwards to 3% (from -2.6%)." (Barry Ritholtz in Seeking Alpha, Feb. 8th)

Home Front: Seasonal Housing Uptick Has Folks Edgy. "DataQuick Information Systems: There's a chance the peak buying activity of 2008 may have already happened. In both 2006 and 2007, escrow closings... peaked in March. That means the homes were likely sold sometime in January or early February... In 2006, a March peak showed there wouldn't be a big spring rebound and proved the downturn was real. In 2007, the subprime crisis arrived in March and pushed down sales for the rest of the year. So far this year, builders and real estate agents say they're seeing the usual rise in sales compared with December." (Sacramento Bee, Feb. 8th)

Some Dallas Townhouses Attract Buyers While Other Projects Are Dead. Dallas: A surplus of unsold townhouses in some close-in Dallas neighborhoods has caused developers to [stop] a few deals. Perry Homes recently sold a block of land on Henderson Avenue in East Dallas... [to] an apartment builder. Perry had planned to build more townhouses [there]... Residential Strategies Inc.: Townhouse starts in central Dallas have dropped more than two-thirds since the peak in early 2007... The number of finished, vacant townhouses has jumped to 335 at the end of 2007 from about 200 in late 2006... A nine-month supply... Townhouse sales have fallen... 17% from their peak in Q3'07." (Dallas Morning News, Feb. 8th)

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