Don,

True, prices have made a small jump from the previous month, but year over year they are down (as are sales). Many housing “bulls” have pointed out at the beginning of this downturn that one month of data does not mean the market is dropping. We’ve had a few months of price drops and “bears” have said “here we go”. I feel both are wrong simply by using history as a guide. Historically, it’s too early to call the beginning of the decline or the bottom of the decline, let alone a market rebound.
Though you’ve only been in real estate a whole “decade” I’m sure you remember what the market was like five year prior to your career choice. You do remember…?

Rich

grim: EVERY SINGLE article I’ve see has completely ignored this important aspect. Whether it is intentional of not, I have no evidence.”

Actually – the NAR November ’05-’06 data released this past week shows not just sales volume but also prices, which in the NE rose in November.

I’ve posted graphs and a link to the spreadsheet at my site:
(Edited, link removed, advertising is prohibited)

Bitter renter? Not likely, since I bought my first house in 1972 and, after owning continuously, sold my sixth in 2005.

What I have not seen to date is any rational argument for buying a house when sale prices are not rising and the cost of renting is half or less. Until there is such, or until prices reach the long-term mean, I’ll remain a renter.

Today, the U.S. Census Department released its monthly “New Residential Home Sales” report for November showing continued weakness to the nation’s new home market most notably in the Northeast region where sales were down an astounding 42.4% as compared to November 2005.

Generally reported as showing “strong” signs of market “stabilization”, the report does, in fact, show an increase to the median and average price for a new home but as we all are well aware, the significant incentives that home builders have been offering are NOT reflected in this report so the price movement is a bit of a “red herring”.

Additionally, the report showed significant increases to inventory and months supply on a year-over-year basis.

http://paper-money.blogspot.com/2006/12/new-home-sales-northeast-meltdown.html

http://www.paperdinero.com/BNN.aspx?id=78

Vote: http://www.msnbc.msn.com/id/16381406/

2007 will get worst !!!

Thing is, those homebuyers are right now scared of buying in and having prices drop further. Therefore they are looking for houses they can live in comfortably for a large number of years, not for entry level trade up houses and I/O’s are losing their appeal to this group (at least the semi sensible ones),

$300k currently gets a condo or a 70 year old 1 bedroom shack that needs another 150k of work to make it habitable, neither of which fits the parameter. And I’m not focusing on “top towns’ either, just removing the horrible ones.

That would suggest to me that there is still quite a way to go.

grim: EVERY SINGLE article I’ve see has completely ignored this important aspect. Whether it is intentional of not, I have no evidence.

Trolls around here accuse us of groupthink. Calling the bottom of the NJ RE market [or any market] soley based on the “cherry picked” metric of VOLUMES reeks of the same “confirmation bias”.

does anybody know what the historical ratio is for median income to median price is? in nj of course

if by saying the standard first time buyer you mean median income households i would say absolutely not. unless of course you are willing to buy something pretty nasty.

then there is the matter of those that make somehwere above the median income who just cant come to terms with buying the overpriced shack. Homeownership needs to be appealing and affordable.

I would say no.

That’s a mighty big “if” scenario.
Rates are 50/50 in either going up or down.
Job creation? In New Jersey? Maybe a job at the mall.
Will salaries rise THAT much to meet the median home price?

The sales slow down started last year around October. The question is what would be a “normal” amount of sales for November? 1999, 2000, 2001..?

Bergen County SFH, Condo, Co-op & Twnhse
Year Sales UnderContract
1999 739 698
2000 703 735
2001 639 788
2002 691 744
2003 778 784
2004 851 861
2005 761 703
2006 604 715 as of 12/07/06

Rich

Yes, I agree that the pace of the decline is beginning to moderate, but we are still trending downwards. You can’t compare contracts year over year unless you take into account cancellation rates. While I’ve seen anecdotal evidence that points to higher resale contract cancellations, I’ve not been able to put together a meaningful dataset to support the argument that cancellations are higher this year, so take that with a grain of salt.

I’m sure I’ll be making the stabilization call sometime mid-year next year. However, I’m not going to make that call until I see at least a quarters worth of closed sales equal with the prior year. Or contract-sales equal year over year for the same length of time, with the caveat that the cancellation rate isn’t significantly higher than the prior period.

Just a note, this is sales volume only, nothing to do with pricing.

jb

KL