From Reuters:
U.S. new home market may take until 2009 to rebound: S&P
Recovery of the U.S. market for new homes could take another year if trouble in the adjustable-rate subprime mortgage market spreads to other types of residential lending, credit-rating agency Standard & Poor’s said on Monday.
“We do not expect to see a recovery for most rated home builders until 2008, under the best of circumstances,” the rating agency said in a research note. “In fact, a rebound could easily slide into 2009 if a subprime contagion spreads to the Alt-A and prime products.”
Rating agency Moody’s raised its forecast on Friday for losses on risky subprime loans originated in 2006 to between 6 percent and 8 percent of the loan principal. In March, Moody’s had forecast losses of 5.5 percent to 6 percent.
…
S&P said that heightened media attention to bankruptcies of some subprime lenders and rising subprime foreclosures have spooked home buyers. And creditors are concerned that buyer wariness may exacerbate an already sharp decline in the overall U.S. housing market.Problems could spread to Alt-A market and prime borrowers. Alt-A loans, also called low-doc or no-doc loans, are made to borrowers without getting documentation to prove a borrower’s income or ability to repay the mortgage. Prime borrowers have proven good credit and credit histories.
Tighter lending requirements could strangle the already weak demand for homes, drive up the supply of homes for sale while driving down prices and pressure the overall U.S. economy, S&P said.
…
The rating agency said the duration of the downturn would be determined by how well the economy and job growth hold up over the next year.
all the media is crying sky is falling. so we have so many blind victims. Long term, it is always good to buy your dream houses. if you wait, you will never get a house. This website is misleading. You should all follow our professional advice, rather than wasting your time here. Pricewise, don’t try to insult sellers by offering ridiculous low balls. We have comparatives, you should talk to your realtors and put in the numbers recommended by your realtors. remember, your realtor is working for the best deal for you.
so Go buy today, before it is too late.
Duck!
another point, contrary to your perception on us, we are a vital part of the economy. we help people find their dream houses; we volunteer in our local community; each and every one of us has to pass the rigorous training(including ethics of course).
We are your compass in navigating the complexed house hunting process. so call your realtor today!
Okay, who is playing realtor? Did Boooya come back? Grim, is that you? Vital part of the economy. :) Oh, wait, I know! It’s Suzanne!!
I am a realtor covering Norther NJ. if you need any help from me, I can probably find a way to work with you.
Sorry I can’t give my phone # here. I know a lot of people here are standing on the other side.
“honest” realtor says ” if you wait, you will never get a house.”
lol
This has got to be boyaaaa.
Okay, who is playing realtor?
Agree, seems too well played.
jb
guys, have fun.
http://www.youtube.com/watch?v=egdmdUj4oZk&mode=related&search=
guys, don’t think we are always commission hungry, we like funny videos too….
http://www.youtube.com/watch?v=irOFAjsnSg0&mode=related&search=
Supposedly, Robert Toll had some negative comments about the NJ housing market at the Milken Institute Global Conference in Los Angeles. If true, this would mark a reversal in Toll’s earlier position that NJ was still a decent market. He supposedly still thought NYC was still hot though.
Given that this is the only reference I could find, I’m not sure how credible it is. Robert Toll, was however, a panelist today on the “Real Estate: What Does the Future Hold?” panel at this conference.
http://www.economicpolicymonitor.com/labels/MilkenConference.html
A different perspective on the market rally from MSN columnist Bill Fleckenstein.
Accurate memories are in short supply in the marketplace, but greed never is. Look back seven years to the mania and note that history appears to be on the way to repeating itself.
http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/DangerMarketPartyingLikeItsMarch2000.aspx
Rent: I’ve followed Toll for about three years. He has been consistent. You may have previously confused NJ with NJ adjacent to NYC, or else areas near Princeton in late-2005/early 2006. Otherwise, he has been consistently negative.
Also note he is referring to his own company’s results, not a broad review of the market. Self-absorbed myopic messianic complex.
Honest-Realtor:
I don’t know what is more offensive:
Your Pollyana-ish salesperson delivery, or
your denial of current real-estate market conditions, which are congently presented on this blog, backed by stats and analysis – or your warped Bush-bashing sense of humor-
…in navigating the complexed house hunting process …
I think boyaaa is more literate :)
correction #13
congently= cogently
I’m a recent buyer and I get upset when I see people trying to paint biased pictures of doom or roses. There will always be windows of opportunity to buy…and bad/obvious periods when buying is not wise. Overall, long term, buying (not necessarily as an investment) is good because people that own homes tend to save more (I think…and correct me if I’m wrong). It seems that lots of people are pissed off about the recent run up in the market. My humble opinion is that prices will fall, maybe 10-15% from 2005 prices and be flat for another 5 years or so. Guess what…if you want to stay put for 10, 15, 20 years…it doesn’t matter! If you want to buy, make sure you buy something and somewhere you want to live for a long time. In 10 years…add a bathroom or update the kitchen.
On the other hand, some buy at all cost comments make me sick. uugghhh.
ok…..I just read all the comments. funny.
“My humble opinion is that prices will fall, maybe 10-15% from 2005 prices and be flat for another 5 years or so.”
Going by some reports, home prices are already down 8-12% from 2005 peak. If you feel prices will go down just another 2-3% before “bottoming” out, yes buying now will help “savings”. But if there is an additional correction of 8-10% in the next couple of years, then that’s another story.
I honestly feel prices will go down more than 5-8% in the next 16-18 months. Which is 13-20% + of discount after adding up mortgage interest, property tax, property maintenance and of course sleepless nights.
Realtors and the like have been making the same “if you don’t buy now, you’ll end up toothless living under a bridge” claim for years. I don’t know anyone who ended up broke because they rented for a year or two longer than they should have, but I do know plenty of folks who got into trouble with homes they couldn’t afford.
Personally I’m at a point where I’m ready for a condo. I will not do a crazy loan, and while I may need to sell in two or three years, I may not. Such things are beyond my control (job transfer, marriage, etc). I’m not looking to make a fast buck because real estate is not an investment, it’s a place to live.
Another brick in the wall
Commentary: Why the Fed may need to raise key rate above 5.5%
http://www.marketwatch.com/news/story/another-brick-wall/story.aspx?guid=%7B62CE9DB2%2DD31F%2D44AB%2DB7E7%2DF96778412139%7D
Was thinking of buying last week, but was turned off by the insulting ask prices.
Didn’t see any serious sellers.
Several houses are available both for rent or sale, and if you bought one of them instead of renting one, in only 23 years, you’ll break even and be right where you started today!
http://graphics.nytimes.com/images/2006/08/26/weekinreview/27leon_graph2.large.gif
Hurry up before it’s too late!
It’s Suzanne!
http://www.youtube.com/watch?v=Ubsd-tWYmZw
State of Arizona tries to prevent Zillow from providing home price estimates:
NAR to put out used home sales report tomorrow. Watch The Corrupt David Lereah spin his ass off
http://housingpanic.blogspot.com/2007/04/nar-to-put-out-used-home-sales-report.html
Don’t be snowed when The Corrupt David Lereah spins the horrific drop in home sales by comparing March to February, when any idiot knows the real and only comparison is March 2007 vs. March 2006.
Watch the clueless and complicit MSM go with the March vs. February number. Also watch the MSM not question the median price number, which doesn’t include incentives and cash back.
And watch the MSM take TCDL’s “it was the weather” excuse and tell the frightened masses that “it appears we’re bottoming”, even though unsold and unwanted inventory will be soaring to close to a year’s supply in many markets.
Regardless of the lies, deception and spin, the numbers tomorrow are going to be truly horrific. Even the NAR won’t be able to hide the truth (spin as they may).
Pain (24)-
Did someone slip you a copy of this report?
Un (23)-
WTF? Do you work for Zillow? What kind of thrall have they got you in?
Expect other states to fall in line with Arizona. Companies that get involved in what is essentially a financial services industry with no more than purty pictures, a flawed algorithm and a business model that was meant for competing with travel agents is going to draw government scrutiny…especially when said company makes exorbitant claims of accuracy, skill and cost efficiency for the consumer.
However skeezy you think Realtors are, one always has the opportunity to find a good one…that is, one who can at least provide accurate information. With Zillow, it’s been proved that all the information they provide is suspect, at best.
I still get a kick out of people who have put their homes for sale at Zillow…only to find the “Zestimate” of their homes undercuts the asking price by 100K…or more.
And Realtors are supposed to be the bad guys?
“each and every one of us has to pass the rigorous training(including ethics of course).”
Honest [3],
Obviously a plant. You owe me a coffee, which I just lost after reading this.
(27) Clotpoll – I noticed a home on Zillow that recently sold, and the “last change in Zestimate” was around +$80,000 (usually this is in the 0+/-$10,000 range max), perhaps due to a recent sale about $100k above the previous Zestimate. Can you point me to a comprehensive article/blog about how to best interprept the “zestimate” (fully understanding that a nationwide website could not accurate estimate a homes worth without intimate knowledge of the neighborhood, upgrades, property etc etc etc)
thanks!
Kurt
It’s best to just ignore Zillow.
jb
Maybe people would have a higher opinion of realtors if they would actually work for their money. One my neighbors is looking for a house in RI and was flabbergasted to see the sellers’ agents at every showing, actually, you know, selling the house.
I sold my house in the Midwest two years ago, and I’m still scratching my head trying to figure out what I got for the $20,000 in commish I paid. I guess I got some amateur photography and basic web hosting, oh yeah, and access to the MLS! Other than that, I had to figure out the right price to ask for my property. My useless agent would have let it sit for 12 months. What the hell, right? He’s not the one making interest payments on it. Free option, baby!
#1. Thanks for giving me my quote of the day: “…remember, your realtor is working for the best deal for you.”
Comparables mean nothing when the market is in flux.
I got a call from a realtor I was working with 9 months ago. He appeared to be a nice guy at the time but I had told him a few months ago I was going to stay put and not look for sometime.
Anyhow, now that I am a lot more RE savvy, thanks to JB, I put him to test. Asked him a few questions –
Mr Agent, how’s the inventory looking? Do you see it increasing? What are you seeing in the field in terms of transactions, etc..
His answer –
“Oh, the inventory is drastically down since last year. People are buying now that Spring is here. ”
Compared to last year this time?
“Yes.. inventory is going down…
This is a great time to buy..
my post got cut off.. here’s the rest of it
[insert NAR speel]..”
What a liar!!!
Has anyone come across any Realtors (other than Clot and KL) that give the true picture of the housing market?!
James Bednar –
I can see (ignoring zillow) as far as “zestimates” go, any reason not to beleive their tax and previous sale history info?
Kurt
Clot, just posting info, why so much hostility?
It’s more than a bit ironic that you have so much scorn for Zillow, yet advise people to trust realtors…
It’s a simple fact of life — anyone earning a commission based upon what I buy, is not working on my behalf; not Skippy over at the Toyota dealer, not Arlene at the local Weichert.
Zillow provides previous sale data, and locates them fairly precisely on satellite and aerial photographs.
Ignoring that, is a bit like ignoring a $20 bill on the street.
The “Zestimate” is fairly useless, but that’s just one aspect of what they provide.
My husband has been a realtor since early 90’s (I am licensed since 1980 but license in referral status.) He is honest and hardworking. There is a (mis)perception that realtors do nothing for their commission. Some agents do more than others but most I know do work hard for their commissions. Some of things they (should) do for sellers: Market analysis, staging recommendations (remove clutter, minor decorating details etc.), quality photographs, open houses, broker luncheons, weekly status report to sellers, etc. Regarding the commission, the selling realtor only sees a fraction of it since commission is split between seller’s agent and buyer’s agent (with their respective brokers getting a chunk of the) so often the agent’s end commission isn’t anywhere near the total commssion. Add to this any overhead the agent has to spend (as an independent contractor) further reducing his/her share. Not to say that hardworking (smart working) realtors can’t do very well – they can and do – but do work harder I believe than most realize.
One thing that always bothers us (and also many here as well) are the “rah rah” remarks agents tend to make – “it’s a great market!” “buy now!” “better move fast!” etc. Again, not all do this but it really is annoying when you know it is not always true.
Speaking of zillow, does anyone know what the lag time is between sales, and when the data shows up in zillow (or property shark for that matter)?