Home Price Declines, But Not Everywhere [Housing Tracker]

Housing Price/Sales Data 

Hints Of More Activity In U.S. Housing Sales. “Illinois Association of Realtors: Home buyers took advantage of sharply falling prices to snap up bargains last month in some parts of the country, though not necessarily in the Chicago region. Sales of existing single-family homes and condos in the nine-county metropolitan Chicago area dropped 25.2% in July from July 2007. Sales were off just 5.76% from June… In Grundy County, home sales from January-July dropped 25.4% from a year earlier and were off 36.7% in DeKalb County. Seven-month sales in Cook County were down 27.9%, to 23,980, in H1’08.” (Chicago Tribune, Aug. 26) 

Lower Prices Boost Sales Of Existing Homes. “Joshua Shapiro, an economist at MFR Inc., said he was "very bearish" on home prices and predicted that annual housing sales will decline by another 10% to 4.5 million homes before the market bottoms out - sometime over the next 12 to 18 months.” (Washington Times, Aug. 26)

C.A.R. Reports Sales Increased 43.4 Percent; Median Home Price Fell 40.3 Percent in July. “California Association of Realtors: California Home sales increased 43.4% in July compared with July 2007, while the median price of an existing home fell 40.3%. C.A.R.: "Deeply-discounted, distressed sales continue to drive volume in many regions of the state. July also was the first full month during which the effects of higher $729,000 conforming loan limits likely had an impact on closed sales. Y/o/y increases in the number of transactions ranged from a 6.7% increase in the San Francisco Bay Area to a 176.5% increase in the Riverside/San Bernardino region. In general, greater percentage gains occurred in lower-priced areas… that are concurrently experiencing the biggest declines in prices." (MarketWatch, Aug. 25)

U.S. Economy: Home Resales Rose More Than Forecast. “National Association of Realtors: Sales of previously owned homes in the U.S. rose 3.1% in July… as inventories of unsold properties increased. Resales advanced more than forecast to an annual rate of 5 million, with at least one-third of the purchases coming from foreclosed properties. The median price dropped 7.1% from July 2007, and the number of homes for sale jumped to a record. Sales averaged a pace of 4.95 million the past three months, the same rate as the previous period, indicating that purchases may have touched a bottom. [However,] the glut of houses for sale means property values will probably keep dropping.” (Bloomberg, Aug. 25)

Economists React: Troubling Housing Inventories. “Joseph Brusuelas, Merk Investments: “The data in July was decidedly mixed. The slight increase in the headline will provide some support to claims of a bottom in the market forming. However, the fact that 40% of sales activity came from banks selling foreclosed homes tends to suggest that absent a fire sale in housing sector, we have some ways to go before things truly stabilize. More troubling was the continued increase in inventories. … The data supports our call of the housing sector not seeing anything resembling stabilization until mid 2009 at the earliest.” (WSJ Blogs, Aug. 25)

Housing Prices Hit '04 Levels. Florida Association of Realtors: “Palm Beach County home prices plunged to a four-year low in July… The median price of an existing single-family home fell to $291,300 in July. That's down 22% from July 2007 and off 13% from June 2008. The median home price in Palm Beach County last saw $300,000 in May 2004... Since late 2005… home prices have dropped 30%… [Home] sales rose slightly to 652 in July, up 8% from a year ago but down 12% from the previous month. In the Treasure Coast, the typical single-family home sold for $159,300, down 31% from July 2007 but off only slightly from June 2008.” (Palm Beach Post, Aug. 25)

Prices Still Rising In Palm Beach’s “Safe Harbor,” Evans Report Says. “The Evans Report by Palm Beach real estate attorney Leslie Evans: The median price of single-family homes sold in Palm Beach rose to $4.3 million in H1’08, up 9% from $3.95M in H1’07. Evans’ report doesn’t even include the $95 million sale of… Donald Trump’s mansion to Russian fertilizer billionaire Dmitry Rybolovlev… in July… Among the big sales in H1’08 were the $81.5M deal for the oceanfront mansion at 1236 S. Ocean Blvd., the $68.5M sale of 60 Blossom Way and $22.45M for the home at 212 Via Palma.” (Palm Beach Post, Aug. 22)

Home Sales, Prices Mostly Fall In Northeast. “The Associated Press-Re/Max Monthly Housing Report showed July sales dropped by at least 20% in five of nine Northeast cities. The report analyzed home sales recorded by all real estate agents in those cities, regardless of company affiliation.” (BusinessWeek, Aug. 25)

Sales Of Preowned Homes In West Rose In July. “NAR: Sales of existing homes in the West edged higher overall in July, as many buyers took advantage of falling prices in foreclosure-ravaged areas in California, Nevada and elsewhere… About 1.1 million preowned houses and condominiums were sold last month in the 13-state region, up almost 1% from the same month last year... But the median home price in the West plunged by more than 22% versus a year ago to $273,200.” (CNN Money, Aug. 25)

Home Sales, Prices Drop In Midwest. “NAR: Existing home sales in the Midwest tumbled 17% last month from July 2007, while the median price in the region inched up to more than $175,000, the National Association of Realtors said Monday… The median price fell in every city in the AP-Re/Max report, except Rapid City, S.D., where it rose by 4.8% from a year ago to $179,000. The largest price drop… was in Detroit where the sinking economy and skyrocketing foreclosures helped push the median price down 36% to $81,000.” (AP via Forbes, Aug. 25)

Housing Slump Spares Few Pinellas Neighborhoods. “Pinellas County, Florida: Single-family home sales are off about 75% from their peak in late 2004, dragging overall prices down about 10% from their highs in 2005-2006… Low- to moderate-income places like Bartlett Park and Highland Oaks in St. Petersburg… recorded home price declines of about 40% from the peak. But [in] upper-income enclaves like Venetian Isles and Snell Isle, the median home price has dropped from about $1-million to less than $600,000 this year. A tiny handful of neighborhoods — Lake St. George in Palm Harbor and Historic Oldsmar, for example — have largely ducked housing depreciation. Another bunch have suffered only modest drops. Euclid-St. Paul, northwest of downtown St. Petersburg, shows a 4% dip.” (St. Petersburg Times, Aug. 24)

 

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Comments

[billddrummer:]

Hi Judy,

Interesting compilation, a terrific resource.

Commentary about the CA housing market is interesting. Home sales are up (if youannualize one month's sales activity) but median prices are down, driven by distressed properties sold off by banks.

The article says that inventory on hand is down from 10 months to 6.7 months. That's the good news. It also says that the average marketing time shrank from 50.7 days to 47.5 days. And a telling comment about Santa Barbara County buried in the footnotes--'a disproportionate number of lower priced homes' sold, thus pushing the median down in June, and accounting for its rapid rise in July.

Here's my take on it:

Santa Barbara County is at the edge of the bubble. I think sales are up over last year because there was virtually no mortgage money available. (If you recall, more than 100 private lenders failed in 2007, the secondary market dried up for MBSs, and CDOs, and exotic mortgage products vanished. This year, the news is all about foreclosures, stemming from loans made during the bubble frenzy.) Now, with the conforming loan limit raised to $729,000, but lenders requiring income and asset documentation, homes are selling, but for much less than they commanded a year ago. And there are waves of homes entering the markets as REOs, that were sold with exotic mortgage money 2 years ago. As I've said repeatedly, it's a series of levers that impact the housing market--affordability, availability of mortgage money, inventory, the ratio of distressed properties sold, and seasonality. July was the last month people would have bought homes before school started. Now that summer is over, look for sales to fall even further, as families with children in school elect to 'wait it out for another year, and see what happens after the elections.'

Keep up the good work. I appreciate all your efforts!

2008 Aug 26 07:59 PM

[SA Editor J...:]

Thanks Bill, both for your interesting analysis and for your ever kind words.

- Judy

2008 Aug 27 04:01 AM

[Still Renting:]

When house prices fall by 40% YOY in the Seattle area, I'll DEFINITELY be in the market. ;)

Heck, maybe 30% since the climb was not as dramatic here.

The only caveot is that there are other elements to this "perfect economic storm" that could torpedo the ship while in drydock. The good news, for lagging markets like Seattle at least, is that any said torpedo will hit before we hit bottom here.

Probably...

2008 Aug 27 10:24 AM

[billddrummer:]

Hi Judy,

Thank you for all your research. It's a pleasure to read your compilations.

And for Still Renting,

It's doubtful that Seattle prices will fall 30-40%. SF has a similar demographic (highly educated, limited supply of homes, essentially fully developed city), it benefited mightily from the bubble years, yet prices are only off 8% from last year. And they're still among the highest in the US.

If SF homes drop 40%, I'd still be renting anyway. They have to fall by 90% for me to get back in the market. And that presumes I can get a mortgage loan with a foreclosure on my credit report.

2008 Aug 27 11:17 AM