Zillow: Homeowners Sinking 'Underwater' As Prices Fall - Housing Tracker

Quote of the Day

“One out of every two homeowners who purchased during the market peak in 2006 is now underwater on their mortgage.” – Zillow.com reports that median home values in the U.S. have declined so much that they are now back to 2005 levels. (Sarasota Herald Tribune, May 7th)

House Sales and Price Data

Closing Glance: Reits Drop On Home Sales Data, Oil Prices. “Shares of real estate investment trusts closed lower Wednesday as pending U.S. home sales dropped to a new low in March and oil hovered near $123 a barrel for the first time. The National Association of Realtors' seasonally adjusted index of pending sales for existing homes fell to 83.0 from a February reading of 83.8, the index's previous low. The index stood at 103.9 in March 2007.” (AP via Chron.com, May 7th)

The WSJ Is Wrong on the Housing Crisis. “Average life expectancy in the U.S. is 78 years but many people leave their houses before their final years, to live in smaller quarters, with relatives, or at nursing homes. If we set somewhat arbitrarily the average age of a person who leaves his/her home at 70 years, we can see that the number of people turning 70 every year in the US will skyrocket from fewer than 2.5 million today to 4.3 million in 2025… This trend was quite favorable to housing in the last 25 years with the number of 70-year olds stagnating in 1984-1994 then falling in 1995-2003.” (Mijka Samora in Seeking Alpha, May 7th)

Realtor Study Predicts Sales Growth. “National Association of Realtors: “Existing-home sales [should] rise from an annual pace of 4.95 million in Q1 to 5.82M in Q4. Existing-home sales are likely to total 5.39M, and then rise 6.1% to 5.72M next year… NAR [forecasts a] median sales price of $213,700 and a 4.1% jump to $222,600 in 2009. New-home sales are expected to fall 30.9% to 536,000 in 2008 before rising 10.1% to 590,000 in 2009. Housing starts, including multifamily units, will probably drop 29.5% to 955,000 in 2008, and then rise 1.3% to 967,000 next year. The median new-home price [should] fall 3.7% to $238,000 in 2008, then rise 5.4% in 2009 to $250,900.” (Nashville Business Journal, May 7th)

R.I. 1Q Home Sales Drop By 23%, Prices 10%. “Rhode Island Association of Realtors: Single-family home sales in Q1’08 across Rhode Island dropped 23.19% to 1,242, as the median price fell 9.93% to $245,000… Condominium sales also fell during Q1, totaling 246 in Q1’08 compared with 390 during Q1’07. Prices, however, fell by only 0.75% to $205,950… In Providence, the 24 condominiums sold during Q1 had a median price of $180,000, about 12.60 percent below the statewide median price.” (Providence Business News, May 7th)

Most Peak Real Estate Buyers ‘Underwater’. Zillow: Roughly 80% of home buyers who bought in Sarasota-Bradenton at the market peak in late 2006 are "underwater" on their mortgage, meaning the price they paid is above the current market value for their house… The so-called negative equity for the Charlotte County-North Port market approaches 85%… Homeowners who bought in some of the most volatile markets -- many parts of California and Florida, as well as Phoenix and Las Vegas -- are seeing negative equity rates that approach twice the national median. That is 95% in some cases.” (Sarasota Herald Tribune, May 7th)

Property Transaction Slowdown Hits County. Pennsylvania: “Signs of a national economic slowdown are showing up in Luzerne County as a drop in the number of property transactions, while prices seem less affected… Deeds, mortgages and realty transfer taxes dropped in Q1’08 compared to Q1’07, according to data provided by the Luzerne County Recorder of Deeds office. In most instances the difference is noticeable. The number of deeds recorded dropped by 402 or 15.2% in the year-to-year comparison. Mortgages fell even further, by 784 to 19.1%.” (Times-Leader, May 7th)

Credit Crisis Posing Problems For Local Housing Market. Illinois: “Peoria Area Association of Realtors: Home sales in the Peoria area dropped 15% for Q1’08 compared to Q1’07…Statewide home sales are… down 30% for Q1… [Y/o/y], total homes sales [decreased 15%] in Q1’07… Average Sale Price. The average sale price for homes in the Peoria area was $135,495 compared to last year’s average sale price of $130,343… an increase of nearly 4% over the previous year. Home inventories for Q1 were 2,519 for January 2008 compared to 2,402 in 2007; 2,378 for February 2008 compared to 2,377 in 2007 and 2,447 for March 2008 compared to 2,440 in 2007.” (NBC Week, May 6th)

Home Sales Increase In SE Michigan, But Prices Way Down. “April home sales are up significantly in Southeast Michigan, even compared to 2005… a record-setting year in the region… Realcomp: In Southeast Michigan, there were 4,671 home sales in April this year, compared to 4,064 in 2007. In 2005, there were 4,434 in April. Oakland County saw a 9.9% increase in April, with 1,102 sales in 2008, compared to 1,003 in 2007… The median home price in Oakland County in April of this year was $149,900, compared to $180,000 in April of last year… The median home sales price in April was $91,318, compared to $135,000 in April of last year.” (Michigan Live, May 6th)

State Home Sales Fall. “Prudential Connecticut Realty… reported double-digit single-family sales drops for the state's eight counties compared to Q1’07. For Fairfield County, Prudential reported a 36% decline, while New Haven County was down 28%. Prudential also said median price declines of 10% in Fairfield County and 7% in New Haven County, but some cities and towns, including Shelton, Fairfield, Ansonia and Seymour, reported higher median prices. For the condo market, Prudential reported sales declines in every county except Middlesex but slight price increases in most counties, including Fairfield and New Haven.” (Connecticut Post, May 6th)

Scripps Issues Million-Dollar Mortgage To Lure Scientist. Florida: “The Scripps Research Institute has started issuing home loans to sought-after scientists, giving one top recruit a $1 million mortgage for an oceanfront condo that cost $850,000. Scripps won't say why the mortgage exceeds the condo's purchase price, or whether the loan was derived from a $310M state grant used to attract the biomedical research powerhouse here in 2003… Tough competition for scientists, coupled with recruits' difficulty in selling their existing homes, prompted Scripps to sweeten offers with housing loans… Top scientists who bring grants and intellectual property typically have multiple offers, making an attractive recruitment package a must.” (Palm Beach Post, May 2nd)

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Comments

[mbborak]

Looks like at least some of the housing inventory is moving out there:
www.baltimoresun.com/b...

[iThinkBig]

Welcome to the free market. You can only fool it so long. But those at the top made out very, very large and some of this was taken out of the little guy in America and I am very pissed about that.

[HowieRoark]

What's particularly interesting in my area is the number of homes for sale with very little budging in price. They can't afford to sell for anything less without writing someone a big check, so these homes will sit on the market until they are foreclosed (and put back on the market) or true valuation catches up.

The market always works; it always corrects. Just like the .coms of the 90s were based on near-fraudulent levels of ideas, the housing bubble was based on an artificial demand. Many people I know were downright greedy. They were too good for their own means and felt they needed something bigger and the lending industry allowed them to believe they could afford it. Some lessons must simply be learned the hard way.

[markg]

Why is it that the NAR never substantiates their opinions and predictions? They are quick to say things like "we expect the market to rebound in the fourth quarter 2007, but NEVER say where the basis of fact is.

[Tom Lindmark]

Can I get some of whatever the NAR is smoking? Where are they going to find all of these buyers who will qualify for a mortgage?

[kurt walter]

Oh, well. The real estate boom is bust. Prices were out of hand. What goes up must come down. Let the real estate auctions handle the mess.