Steven R. Smith

While Retail Sales Decline, FHA House Sales Soar

Steve O, what I have seen, is in the most dynamic downward markets, the prices went right past Supportable Demand in a huge way. Some areas in my Region have seen price declines of 5-10% per month.

Some of this has to do with the increase in Crime Rates, which have not made their way to national databases yet. Nor has the Local Unemployment Rates been reported.

Imagine a city with a 25% Unemployment rate, including those that are collecting benefits and those who have used their up but are still not working; combined with a huge increase in burgularies and other property thefts.

One New Tract that I called on in central Riverside County, was giving away Burglar Alarms to new home buyers. Yikes, not good.


On Sep 05 10:12 AM Steve Owen wrote:

> The author's main point is well taken. Many multiple listing services
> do not report concessions. And, often those that do have skewed results
> because real estate agents try to hide things like personal property
> included in the sale, for various reasons. Depending on the amount
> of concessions that are typical, the market data is often over reported
> as to sale price. Whether or not we have reached bottom is debatable
> from several points, but if the example given in the story is typical
> in those areas with a lot of excess inventory, then we probably have
> not. Add to that the shadow inventory of vacant houses not actively
> on the market and rising unemployment rates. Add to that potential
> new problems coming from option ARMs and commercial real estate.
> Add to that the high probability of fraud in some markets. After
> all is said and done, the bottom for real estate in some hard-hit
> markets could quite likely be some distance further down.