From Reuters:
Realtors see lower US home sales
“The National Association of Realtors on Tuesday lowered its forecast for U.S. home sales in 2006 and called on the Federal Reserve to stop raising interest rates because parts of the housing market are ‘vulnerable.'”
“‘Experiencing a slowing from a hot market is a good thing because we need a solid housing sector to provide an underlying base to the economy, and slower appreciation will help to preserve long-term affordability,’ said David Lereah, the group’s chief economist.”
“The trade group, in its monthly forecast, said sales of existing homes should fall 6.8 percent to 6.60 million this year from the 2005 record of 7.08 million. Sales of new homes should decline 13.4 percent to 1.11 million from a record 1.28 million in 2005.”
“That is below the group’s earlier forecast of 6.62 million existing home sales and 1.13 million new homes sales in 2006.”
“The Realtors said housing starts should fall 6.2 percent to 1.94 million in 2006 from 2.07 million last year.”
“The Realtors said the 30-year fixed-rate mortgage should average 6.9 percent during the second half of the year. The national median existing-home price for all housing types is forecast to rise 5.3 percent to $231,300.”
What about soft landing?
When the Fed Rates steady at 1% for months the NAR was happy about it… remember their language “no housing bubble” ???
Looks like NAR wants to make Bernanke the scapegoat of the housing bubble.
How self serving! The NAR thinks the Fed and the rest of the country is at its beckon call. What is good for the NAR may not be good for the country as a whole. We must wring out the excesses over the past few years. And if that causes pain for the NAR, so be it. All industries go through this.
Am I reading this right? The NAR is practically begging the Fed to pause the rate hikes? Bwahahaha!
and slower appreciation will help to preserve long-term affordability,’ said David Lereah, the group’s chief economist.”
hahahah!!
NAR should be ashamed, crying “foul” at this point in the game.
Can’t we just run them out of Dodge now? What is their reason for existence anyway?
A bunch of useless, interfering parasitic middlemen. Get them the heck out of the free-market economy.
A couple more years of the internet, a few more interations of Zillow, some search engine training sessions for people Ages of 40-55 and the NAR will be history.
I just have to be patient.
The national median existing-home price for all housing types is forecast to rise 5.3 percent to $231,300
rise 5.3%?? rising interest rates, rising inventory, rising foreclosure rates, declining sales…
guys, when do see declining prices?? that’s what i wanna know. doesn’t make sense to me at all.
The national median existing-home price for all housing types is forecast to rise 5.3 percent to $231,300.”
That would be all the houses that are currently on the market with a list price of over $600,000 now going for $350,000
OT…but important.
It’s been a while since we discussed the yield curve after it seemed to snap back to life a few weeks ago. Well, currently only 1 basis point separates the 2 yr. (4.99%) and 10 yr. (5.00%) notes. We could see an inversion before the day is out.
Rentinginnj
Didn’t we see a temporary inversion last week on one day, or am I mistaken.
Lasted a few moments?
Pat
More from HousingBubble:
“Historically, home prices rise 1.5 to 2 percentage points faster than the rate of inflation, so the rise we anticipate in existing home prices this year is actually a little above the high end of historic norms,” Lereah said. “The double-digit home price gains we saw in 2005 underscore what a superlative year it was.”
Inflation, as measured by the Consumer Price Index, is seen at 3.1 percent in 2006, compared with 3.4 percent last year. Growth in the U.S. gross domestic product is likely to be 3.4 percent this year. Inflation-adjusted disposable personal income should grow 3.1 percent this year.
Say, just say, house prices increased say 10% each year for the last 3 years. Then wouldn’t the market either have to drop or stay stagnant for a certain number of years in order to correct to “proper” levels?
How come the NAR mentions normalcy in the current market but never mentions the possible correction for the exuberance in the market of the past 3 years?
“Didn’t we see a temporary inversion last week on one day, or am I mistaken.”
Yes, but it was a different kind of inversion. The 3 month bill fell below the Federal Funds target rate.
Perhaps someone could shed some light on the practical implications of this type of inversion versus the 10 yr note falling below the 2 year.
Update:
Yield curve is now flat
2 yr 5.00%
10 yr. 5.00%
(Marketwatch Yield Curve site)
http://tinyurl.com/av8wa
inversion
http://walkthrough.nytimes.com/?p=147
pat
The national median existing-home price for all housing types is forecast to rise 5.3 percent to $231,300.”
Sure, whatever you say.
This post has been removed by the author.
Welcome to the dead zone
Real estate survival guide: The great housing bubble has finally started to deflate, and the fall will be harder in some markets than others.
By Shawn Tully, FORTUNE senior writer
May 5, 2006: 12:14 PM EDT
NEW YORK (FORTUNE) – The stories keep piling up. In many once-sizzling markets around the country, accounts of dropping list prices have replaced tales of waiting lists for unbuilt condos and bidding wars over humdrum three-bedroom colonials.
The message is clear. Five years of superheated price gains rescued America from stock market collapse, put billions in consumers’ pockets, and ignited a building boom that bolstered the nation’s economy. But it’s over. The great housing bubble has finally started to deflate.
You won’t find that news in broad national statistics or the upbeat comments from the real estate industry. The latest official figures, for example, show both new and existing home sales rising in March, a mixed bag on prices – and a record number of new homes on the market.
But FORTUNE’s on-the-ground reporting – in what up to now have been some of the nation’s hottest areas – paints a very different picture: Contracts are being canceled, deals are drying up, prices are starting to drop. The psychology is shifting even as thousands of new homes and condos join the for-sale listings each day – so the downward pressure will only get worse.
“The buyers’ sense of urgency is gone,” says Bob Toll, CEO of luxury builder Toll Brothers (Research), who has long been a housing bull. “They see the market going soft, so they stall.”
more…
Things are just starting to get nasty. This is going to be very bad.
Everyone:
I told you months ago that the RE bulls used the caveat that there would be no change in interest rates as they forecasted 2006.
Although this backpedalling is a joke, it is their CYA trump card, and they are cashing in.
As pathetic as it is alarming.
chicago
Can someone confirm this piece from the WSJ:
“Generalized angst about interest rates is almost certainly contributing to builders’ pain. What’s also not helping today is a rather startling cri de coeur from the National Association of Realtors, which cut its forecast for new and preowned home sales this year. More interestingly, NAR chief economist David Lereah called for the Fed to stop this instant with interest-rate increases, warning the economy depends on a strong housing market.
But the Fed’s rate increases still haven’t had much of an effect on the long-term rates most critical to the housing market, independent economist Bob Brusca pointed out. The 10-year note is still yielding just 5%, and 30-year mortgage rates are still historically reasonable. In that light, Mr. Lereah’s demand “smacks of desperation,” Mr. Brusca says, and might cause enough alarm to make potential first-time home-buyers more likely to stay on the sidelines. “I would see this as a mistake [on Mr. Lereah’s part] and not an indicator of bad things to happen,” Mr. Brusca said, adding: “Except for home builders.”
Why would NAR show their hand like that? Have they gotten used to special handling? Why would they expect some kind of coddling in response to such a request?
I mean, come on. A 7.5% 30-yr. fixed rate should seem like a walk in the park for buyers, right?
Ahhhhh, if only those damn home prices hadn’t gone up so much, huh?
Pat
Why would NAR show their hand like that? Have they gotten used to special handling? Why would they expect some kind of coddling in response to such a request?
I mean, come on. A 7.5% 30-yr. fixed rate should seem like a walk in the park for buyers, right?
Ahhhhh, if only those damn home prices hadn’t gone up so much, huh?
Pat
it seems like every headline and/or report concentrates on the fact that rates are going up and this is the primary culprit for increased inventories, declining sales trends and housing start numbers. Although rates have gone up in the last 18-24 months we are still at historical lows. I have a masters degree, a decent job and i do alright financially. Why doesnt any concentrate on the affordability aspects of the current market. I calculate the numbers on 500k and based on my numbers i would be putting myself in some pretty risky waters. does anyone else think its more affordability than it is interst rates.
Babababa Boycott ripoff HOUSE PRICES!!!
I need a house now!! I’m tired of living in this dump!
Bob
If one have been using financing consistent with the type that is derided at NNJ RE B, then clearly one’s costs have risen.
does anyone else think its more affordability than it is interst rates.
I do!! I do!!
Yes, anon 2:05, that was my point at 2:00.
At 6.7%, 7.5% – even 8.5% – a lot of us should be buying.
Pat
The NAR certainly didn’t have a problem with the Fed’s monetary policy 3 years ago which was the genesis of the bubble. Why should they now?
Shouldn’t they have mentioned something as the prices were getting overheated to ridiculous and unsustainable levels? NNNAAAHHH!!!!!!
The IO and ARM products have been the enablers of this market.
Unfortunately, those “enablers” aren’t working anymore. The spread between them and the traditional products has narrowed dramatically.
If you look at the 15/30-fixed rates, over the past year, the recent movement looks benign. However, look at a 5/1 Jumbo IO over the same time period, the rate change is nothing short of incredible.
The push for 40/50 year mortgages is proof that the industry is trying everying it can to come up with the next “affordability” gimmic to keep the music going..
grim
Lereah is a JERK!
He should be held accoutnable for pushing many bagholding fools into a house by pumping away.
THINK FOR YOURSELF CUZ IF YOU DON’T SOME OTHER SELF-SERVING SLUG WILL DO IT FOR YOU. AND YOU WON’T LIKE THE CONSEQUENCES.
BOYCOTT SNOOT RAISED CHATHAM HOUSES
BOYCOTT BIDDDING BLEED BABY BLEED
BOOOOOOYAAAAAAA
Bob “The Real Deal”
DO NOT BID!
NOOTT’ING ZERO .
THE ENTITLEMENT GAME IS OVER SELLERS.
RUN FOR THE EXITS.
NO BUYERS. NOONE BUY PRICES WILL COOLAPSE.
THIS IS GOOD!
IT GETS PRICES DOWN TO REASONABLE AFFORDABLE LEVELS WHEREBY HOMEOWNERS LIVE AS OPPOSED TO GAMBLE WITH THEIR HOUSE.
BOOOOOOOOOOOOOYCOTT HOUSES
NOTTT’ING NO BIDS STARVE!
Cheers
Bob
Grim,
The article you are refering to:
“Converging on Inverting”
Its a sub article (blog roll they call it)
“Burning Down the House”
June 6, 2006 2:31 p.m.
by Mark Gongloff
The Cooooolapse has began!
Today is the day. watch prices and inventory go in opposite directions!
Boycott Chatham Houses!
Boycott Bidding. NO MAAS to RIPOFF PRICES
Just DO IT!
Bob
Lereah? do you mean, Leareah the Diarrhea?
Whatever he says runs with stink.
As Grim said, I blame IO and ARM for the current mess in real estate.
The NAR has a lot of nerve – they had their turn getting rich – now tell them to get lost.
it seems like every headline and/or report concentrates on the fact that rates are going up
Yup, for the NAR it’s all about:
-Rates are going up
-Energy Prices are straining budgets
-The Media is scaring us
-Buyers are being unrealistic
How about prices are too high? That we will never hear from NAR.
Spitzer needs to bring lawsuits against the NAR.
I feel bad for those bagholding fools who will pay for years to come BUT>>>>>>>
Can’t have it all forever. Time for PAINnnnnnnnnnnaaaaaahhhhhh
Boycott High priced JUNK BOXES!
Just DO IT!
Bob
Governing Magazine has an article this month on RE organizations and the pull they have with statehouses and congress.
They are heavy contributors to campaigns. The article is not online unfortunately. Maybe I could scan it for you grim.
Interest rates go up, the stock market went down. Is there a correlation? How would one project on the outcome of the stockmarket? Go on down or keep flutuating around 11?
Remember tha anti bubble reports?
Check out
“http://bubblemeter.blogspot.com/2006/06/nar-to-bernanke-dont-raise-rates.html”>this post on this subject.
Remember tha anti bubble reports?
Check out this post on this subject.
David Liarea is a piece of work.
The article Grim posted earlier today is excellent:
http://tinyurl.com/jht5o
thanks thanks RentinginNJ 3:18 pm and everyone else
i feel a bit better knowing that many of you support the fact that affordability is a major factor … i began questioning my fianances, rational thought process and many other things..
I remain the sidelines…
bobby
If you think you’ve seen every financial calculator out there, think again:
http://money.aol.com/calculators
They have calculators for every financial scenario, savings accounts, loans, everything imaginable.
It’s Payback time!
Make sure you are “Fully” compensated for you aggravation time and patience in dealing with Greedy money grubbing sellers and realtors.
Stick it to’em Baby!
Babababababa BOOOOOOOOOOYCOTT!
Cheers!
Bob
Anonymous said…
Interest rates go up, the stock market went down. Is there a correlation? How would one project on the outcome of the stockmarket? Go on down or keep flutuating around 11?
3:30 PM
Focus on your objectives.
Design an appropriate portfolio.
Throw your statements in the sock drawer.
Remove all links to your brokerage account.
Sleep at night.
Drink Laphraoig as needed.
“‘Experiencing a slowing from a hot market is a good thing because we need a solid housing sector to provide an underlying base to the economy, and slower appreciation will help to preserve long-term affordability,’ said David Lereah, the group’s chief economist.”
SLOWER APPRECIATION TO PRESERVE LONG-TERM AFFORDABILITY!
HAAHAHAHAHAHAHAHAAAAAAAAAAAAA!
THIS GUY IS A _ ___________!
Babababababbaa
Bob
This kind of Propaganda should be outlawed!
Babababababa
Bob
ATTENTION!!!
Inventory going parabolic!
This morning Bob accessed GSML inventory and listings were at 30,233
NOW
“Welcome to the new home of Garden State MLS’ public search engine. Currently, there are 30,299 properties advertised for sale in NJ on our site. For Residential Properties that are Multiple Listed with Garden State”
HOLY SMOKES!
PAPAPAPAPAPAPA PANIC!
Bob
Invenory UP Prices Down!
GOOD FORMULA to Humble a few Mega-Housing Bubbleheads.
Bababababbaa Boycott!
Bob
“Currently, there are 30,326 properties advertised for sale in NJ on our site.”
http://www.gsmls.com/
That’s up 300 from yesterday!
They’re running for the exits!
Has anyone been tracking the daily numbers from gsmls.com over time?
I’d love to see that in a graph!
check out the CNNmoney.com poll results
Do you believe re is a good investment right now?
Yes- 30%(Where do they buy their ganga?)
Maybe in near future- 12% (namby pambies)
No- 51% (smart!)
Not Sure- 7% (these were dropped on their heads as babies)
Pat
PARABOLIC INVENTORY BUILD~!
PAPAPAPAPA PANIC!
DO NOT RUSH OUT THE DOOR AT THE SAME TIME. OOOHHH IT’S TOO LATE.
REMEMBER HOUSING IS NOT LIKE STOCKS. YOU CAN’T SELL IN A SECOND.
THAT’S NOT SO GOOD WHEN PRICES ARE FALLING OFF A CLIFF.
BBABABABBABABABABA
Bob
Does anyone think the NAR market conditions reports should be updated to reflect more truth than false hype?
Does anyone know have any numbers related to Fairfield County, Connecticut? Or do you know of any blogs that discuss that area?
What is the $1 million + market doing there?
here’s the “Normal” “Cooling” market GSML LISTING HISTORY
March 6, 2006 —- 24,111
April 12, 2006 —- 26,582
May 3, 2006 ——– 28,110
June 5, 2006 ——- 30,116
TODAY hourly changes–30,326
OUCH!
NORMAL? Yeah!
Bababbabababa
Bob
are you trying to say something Bob?
TODAY hourly changes–30,326
30,340 and counting.
Gett’en all choked up.
Rational Patient Buyers will be rewarded. Tired of hearing the Entitled bunch think they are geniuses. You know the one that had no money in their pocket but bought a house and now they are up 40% ON PAPER! Evaporating profits for this point on.
hehehehehe
Babababababa
Bob
PARABOLIC!!!!!!!!!!!!
TODAY hourly changes–30,326
30,340 and counting.
PAPAPAPAPPAPAPAPA!
Bob
40,000 Party !!!!!
by September?
Babbabababababababa
Bob
Good night Buyers Sleep well.
Sellers and realtors have a few cocktails it may help.
Bababbababa
Bob
Bob,
You do post too damn much… but I do like when you write in the third person.
It paints an intersting picture of you.
Up Again
“Welcome to the new home of Garden State MLS’ public search engine. Currently, there are 30,352 properties advertised for sale in NJ on our site. For Residential Properties that are Multiple Listed with Garden State”
Good night sellers and realtors Try to sleep.
Babababbaa
Bob
Bob, what do you do for a living. Are you independently wealthy and don’t have to work? What do you think of the stock market?
Is it possible to get online the list of off-site conditions which would affect the value of residential properties in Monmouth County? I know that these are supposed to be available pursuant to NJ Off-Site Disclosure Act (PL 1995. C. 235), but are they online?
RE Investor seems to be rather quite today. Probably busy trying to put his ‘investments’ for sale.
In an earlier thread, “Escape from NJ” wrote that Bob is “Our big toe leading the foot of righteousness into the butt of ignorance.”
Poetic.
“RE Investor seems to be rather quiet today. Probably busy trying to put his ‘investments’ for sale.”
Probably “investments” # 30,351 and 30,352 on GSMLS.
This is just the beginning. A significant portion of the ARMs are supposed to adjust next year.
I can’t believe the arrogance of NAR. They really think the fed should help bail them out, please……..Yea right….They only care about their own self interests, not you, not me only them.
It is hard to believe the reversal by the NAR in the past 6 months. I Agree the nerve of this organization to plead.They get exactly what they deserve.
The fed is controlled & pressured by retailers, real estate agents & car dealers.
Consumer spending and insane borrowing is what is keeping the economy going especially in NYC & Northern NJ.
People here live & die by their purchases and the outrageous sums of money they pay to buy a co-op or condo apartment.
If prices have gone down, I haven’t seen it. In Hudson county prices are higher than ever, rents are rising by 20% annually. You cannot live in the area unless you are making at least $125,000 a year as a single person. Buying anything in northern or central Jersey is impossible unless you make over $200,000 a year and can put down 20%.
The area is attracting Paris Hilton types who spend thousands on clothes & will pay whatever is asked to live in the trendiest of neighborhoods…
I don’t see prices in the NYC /NJ/ LI/ Westchester or Rockland areas falling or even slowing at all.
The area is attracting the wealthiest citizens in the country and those who are middle class or make in the five figures are moving out in droves.
here in new jersey for many its all a front.
Remember most Americans save little or no money.
New Car , no problem, anyone can
finance a new car.
House payment , no problem, thats what arm’s are for.
House accounts at Blooms,Lord,Norstroms,Gap,etc,
No Problem, 21%Interest.
Its all a front. And they want the best schools to go with it.
And Vacations at the Jersey Shore.
Skiing in the Winter, a must.
It goes on and on.
And you have to live in Bergen,Morris, Union, Essex.
anon @ 7:53
I don’t see prices in the NYC /NJ/ LI/ Westchester or Rockland areas falling or even slowing at all.
As someone pointed out the other day, buyers are still relying heavily on ARM loans. The bubble is growing bigger and potential rupture points are increasing.
RE Investor seems to be rather quite today. Probably busy trying to put his ‘investments’ for sale.
Who says I have to post all the damn time? Do I have to ask your permission to not post? Look, I get busy sometimes and have to do stuff. I don’t have limitless time like Bob to post 50 times a day saying the same freaking thing like some broken record with the needle stuck in the groove.
Alright everyone – gather in a circle – hold hands:
Cum by ya my lord, cum ba ya.
Cum ba ya my lord, cum ba ya.
Cum ba ya my lord, cum ba ya.
Oh lord, cum ba ya.
reinvestor @ 8:38
Who says I have to post all the damn time? Do I have to ask your permission to not post? Look, I get busy sometimes and have to do stuff. I don’t have limitless time like Bob to post 50 times a day saying the same freaking thing like some broken record with the needle stuck in the groove.
whooo .. The investor sounds pretty upset today.
Why would there be a recession if house prices fall? Falling house prices equates to less mortgage which in turn equates to more investments and spending.
We could avert a recession if the sellers agree to reduce their prices quickly.
I don’t see prices in the NYC /NJ/ LI/ Westchester or Rockland areas falling or even slowing at all.
April sales volume in Westchester fell 19% YOY. With the volume at a near standstill, it’s only a matter of time.
Why would there be a recession if house prices fall?
Wage growth has been stagnent for the past few years. People have been able, however, to confer generous raises on themselves through home equity extraction. With home values falling, not only will this not be possible, but people will actually realize they didn’t really “extract” equity, they simply took a loan that needs to be paid back.
Bob,
Speak English for god’s sake!!!!!
Enough with this BABA PAPA $hit!!!!!
anon 11:22, either you’re delusional or you’re a liar. it’s clear anywhere you look that the slowdown has begun. GSMLS passing 30k, inventory up 70% from one year ago, more reductions, increased days on market. it’s happening, and that’s an empirical analysis. first come an increase in inventory, then price declines. in 6 months the economy will further slow, interest rates will be higher and housing prices will be under further assault. it’s going to look worse as time goes on until an equilibrium is found and where that is is anyone’s guess.
Can somebody check the sales data around Journal Square? I won’t call anon11:22 a liar since I don’t know the detail. But here, in Edison, I see more and more signs everyday, and they STAY there for months!!
007
“The National Association of Realtors…called on the Federal Reserve to stop raising interest rates because parts of the housing market are ‘vulnerable.'”
For the posters who were upset over calls for a boycott of open houses because it disrupts the natural flow of the market…I would like to know what you think of Lereah calling on the Fed to stop raising interest rates. Isn’t this also an attempt at disruption? Do you find Lereah’s call more infuriating being that it is coming from someone in a highly public position rather than random boycott calls coming from an anonymous poster on a blog?
I find Lereah’s call to be very self serving more so than it is for the good of the over all economy. I would just like some help on seeing the other side of the coin.
– Cultural Infidel
anon @11:22,
I live in northeastern Bergen County area. The inventory was doubled. Almost identical house was sold at $940K last Summer but the similar one was sold at $889K this Jan.
I had a condo in Fort Lee. Put it out for sale last June and had 3 offers. Tried to close at $440K but the buyer was not qualified (last August). It was empty until this April and finally closed at the end of April at $415K.
As for rental market, the price kept falling in Fort Lee area. Too many condos/apartments were for rents.
“I don’t see prices in the NYC /NJ/ LI/ Westchester or Rockland areas falling or even slowing at all. ”
I think you’re a realtor. Because I follow all these areas and I see price reductions everyday plus massively increasing inventory. And in my own hometown on LI, Pulte built apartments and just slashed asking prices on all of them by over 100K. So I don’t know what info you’re looking at but it’s there.
New McMansions in my town originally on sale for $1.8M since last December are re-priced at $1.6M.
When I talked to the realtor, she told me to put the bid for $1.4M and will probably get it. I asked, how about $1.2M? She said, maybe. If it sits there for another 6 months.
It’s going to take another several months of no sales before sellers get it in their heads that it’s a different world now.
By the end of the year, you’ll see all the prices drop
to the guy who thinks the market’s fine in westchester, you’re wrong. inventory in my town has tripled since last fall. nothing is selling. sellers are making piddling little price cuts, but no one is biting. $50,000 cut on a $2 million home? try again. these people are going to chase the market down all the way to the bottom. if you are a seller and you’re not in contract by the end of June, get ready for some serious pain. The second half of this summer is going to be brutal.
NJGAL,
You are correct, but please don’t feed the trolls.
Anyone buying a condo in Jersey City today deserves the financial punishment they receive.
There are what, no less than 6 condo towers buing built right now, adding how many thousands of new units to inventory?
Cultural Infidel, see me at 2:00 pm
Pat
Orange & Rockland both down, too.
Problem also is that they built the yuppies a lot of new infrastructure and now the price-out townies are going north, prices are going south, and all the new schools are getting empty.
Pat
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