House Price/Sales Trends
Risk Of Price Declines Falls In Most Markets. “PMI Mortgage Insurance Co. report: The risk of price declines fell during Q1 in 326 of the 381 metropolitan statistical areas tracked, or 86%. Of the 55 markets where PMI gauged the risk of price declines had increased, all but five were in California, Florida, Nevada and Arizona. PMI's U.S. Market Risk Index is based on home-price data, labor market statistics, housing affordability, household income, past trends in price appreciation, and mortgage rates. The index generates a score estimating the chance that home prices will be lower in two years. PMI projects a 40% or greater chance that prices will fall in 16 of the 50 largest MSAs during the next two years. All but three of those markets -- Las Vegas, Phoenix and Providence, R.I. -- are in California and Florida.” (Inman News, July 8th)
Developers In a Bind Over Prices. “Early on, the lender and developer agree on a price for each condo unit (generally about 90% of the sales price)… The developer cannot go below the release price without consulting the bank, because that revenue is reserved for the lender… Marcus & Millichap, a real estate investment advisor: Prices [are] falling in borderline neighborhoods, especially in Brooklyn, Queens and the Bronx… If a developer does need to go lower than the release price, the bank may ask the developer to bring on additional partners or to take out more loans to cover the bank's reduced revenue. And now, those extra loans are more expensive because credit has dried up.” (The Real Deal, July 7th)
Real Estate TV Programs Paying Off. “Despite the housing slump, real estate TV programs are doing well. Industry pros say that the housing slump has generated more interest and say that real estate TV is easy and inexpensive to produce. NY Residential, a new New York City real estate TV program, recently hit the air as the second local show of its kind. HGTV is in the casting stages of another series for Tri-state-area properties.” (Inman News, July 8th)
Builders Bearish On California. “California Building Industry Association: Single-family housing production this year is forecast to be down 75% from a peak year in 2005. Total housing production, including single-family and multifamily, is projected at 72,350 units this year, with 38,250 single-family units and 34,100 multifamily units.” (Inman News, July 7th)
Seeking Alpha's Housing Tracker is a collection of housing-related excerpts from various sources, grouped by topic. Feel free to post any interesting links on the subject in the comments section below.
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