From the National Association of Realtors (NAR):
Pending Homes Sales Index Rises
Pending home sales – a leading indicator for the housing sector – have risen for the last two months, according to the National Association of Realtors®.
The Pending Home Sales Index,* based on contracts signed in June, increased 0.4 percent to a reading of 113.9 from an upwardly revised level of 113.5 in June, but is 9.6 percent below June 2005.
The index is based on pending sales of existing homes. A sale is listed as pending when the contract has been signed and the transaction has not closed, but the sale usually is finalized within one or two months of signing.
An index of 100 is equal to the average level of contract activity during 2001, the first year to be examined, and was the first of five consecutive record years for existing-home sales.
…
Regionally, the PHSI in the South rose 2.5 percent in June to 130.7 but was 4.8 percent below June 2005. The index in the Midwest increased 1.9 percent to 103.3 in June but was 11.9 percent below a year ago. The index in the West was unchanged, holding at 110.1 in June, and was 14.2 percent lower than June 2005. In the Northeast, the index dropped 6.3 percent in June to 99.4 and was 11.6 percent below a year ago.
The PHSI data can be found here:
Pending Home Sales Index (PHSI) (PDF)
Caveat Emptor!
Grim
If I was a math wizard, I’d give a prediction on how this will be reflected in sales numbers for the coming months, but I’m not.
I’ll give a guess anyway, YOY sales will be down somewhere between 10% and 20% over the next two months, each month.
Sellers, you may want to consider lowering prices below 2005 comps or pulling your houses off the markets. The main selling season is down and it’s going in the books as a bloodbath.
JM
meant done, not down…
JM
Hey, RE101-
Love to hear your commentary on all the latest numbers.
JM
Info on Condo sales:
http://realestate.msn.com/buying/Articlekip.aspx?cp-documentid=710370
I thought some might be interested in this data:
Bergen County SFH, Townhouse, Condo Co-op
Sold – Under Contract – Active – Median Price
July 2006 / 2005 / 2004 / 2003 / 2002
Sold: 843 / 1,081 / 1,282 / 1,130 / 1,069
UC: 739 / 938 / 967 / 1,138 / 893
Active: 6,429 / 4,158 / 4,136 / ? / ? *
Med$k: $490 / $480 / $455 / $380 / $335
* NJMLS data for number of active listing does not go back beyond 1/1/2004
If sellers need to sell, I’d recommend they do what they need to sell.
Japan just saw it’s first tick up in land prices in 14 years. That’s right, the land market in Japan has been declining for 14 straight years. It’s only now showing signs of stability. Can you imagine? Journalists are celebrating because the decline has stopped. How many more years will it take to break even? I’m not sure anyone would even dare a prediction.
For those who think you can simply hold on to property for 5 years and ride out a downturn, you might want rethink your position. I’m not saying that there isn’t some probability of a 5 year recovery, but precedent that says otherwise has been set. And it’s been set in a country where land is much more scarce than ours.
Caveat Emptor,
grim
Lots of houses are under contract, but not sold. I wonder how long a home can be under contract and if the number is counted in the pending Home Sales.
Boy I hope not. I stuck in a house I want to sell in about two years. I’d love to get out now, but have a wife that doesn’t want to relocate atleast until then.
Can’t seem to convince her we should sell now, as we only just “down sized” last year.
But I do think it we could retain more of any equity we might have by selling now, before it turns worse.
Also there are some under contracts eals off – I heard couple of houses ack on the market because buyers didn’t show on the closing day..
Sellers, you may want to consider lowering prices below 2005 comps or pulling your houses off the markets. The main selling season is down and it’s going in the books as a bloodbath.
JM
8/01/2006 10:33:57 AM
slide 4 describes this activity
https://njrereport.com/sd.ppt
OT, but I am guessing a sure sign of people overextended on their mortgages will be evident if they keep their windows open today through Thursday.
“I heard couple of houses back on the market because buyers didn’t show on the closing day.”
That’s some stunt!
hey Richinnorthnj
those stats are great. can you get them for morris county? or, better yet, are statewide stats like that up on a public site?
i’ve seen a growing number “reappear” in the listings. i bet som smart buyers walked, waiting for a better deal.
holding off for now in morris cty
90.4% Fools especially those that purchased on the coastal bubblemarkets.
You are going to be underwater shortly on your purchase.
BAAAAAAAAAAWAAAAAHAHAHAHAHA
Bob
I was surprised to see the index increased by 0.4% nationally, not surprised to see Northeast down 6.3%. I expect similar drops over the coming months.
My realtor said June was absolutely dead, but July had more action with people finally caving in and buying before school starts. I don’t think the school buyers will provide enough juice to create a MoM increase though, maybe just less of a decrease for July.
can you get them for morris county? or, better yet, are statewide stats like that up on a public site?
The information I received is off the private NJMLS system.
The NJMLS doesn’t cover much of Morris County as well as the GSMLS (which I don’t have access to).
I heard couple of houses back on the market because buyers didn’t show on the closing day.
Doesn’t the seller get to keep the deposit (in my area, it’s generally 10%) if that happens?
From what I understand that 10% is yours as the seller, but the buyer is obviously going to hire a lawyer to get the 10% back, so I wouldn’t spend all 10% at once. Also, not everyone puts down 10%.
A deposit of 10 percent? That’s a heck of alot of “good faith”.
Deposits are typically closer to 1 percent.
grim
I am not sure how much deposit the previous buyers put and what happen to the money, this was a house which in the same community I was looking for.
I bet the buyers definitely feel worth to give up deposit comparing the house value down turn
1%? My understanding was the general practice is that you put in your $1,000 check when you send in your offer. Then after atty review a deposit of 10% is usually due within 30 days or something. That’s what I did when I bought my house, and the people who I sold my house to did the same thing.
Is that $1000 called the earnest money?
I think people would rather be “unearnest” than being a bag-holding fool!
Sorry I was talking about earnest money with the offer, not the second deposit. I’d love to hear the agents actual numbers on these. KL?
grim
How many more years will it take to break even? I’m not sure anyone would even dare a prediction.
In Japan, I think they had deflation (and 0% interest rates) so flat house prices weren’t that bad..
I’m not sure I believe the bit about buyers not showing up at closing. Forfeiture of deposit is going to be the least of their problems.
grim
Deposits
( purely from my direct experience.)
A $ 1000.00 deposit is taken upon signing the offer. ( In contract form) after attorney review period is over an additional deposit is taken – The second deposit could be anywhere from $0 to 50 % of down payment which would be 10% that’s a rarity, especially with 5% and less downpayments. It does not have to be a % and usually ends up btwn 4,000 & 9000 if not 100% financing.
When it is 100% fin but buyer is paying closing I suggest closing cost be put out up front to sooth sellers, I suggest this and buyers attorneys go along with it because they know that deposits mean nothing. There are too many ways to get out of a contract ( yes even at the last minute) Seller’s attorneys do not fight for it.
This is my eperience.
KL
eperience
oops my x is with anons b and d
KL
Two things,
Am I the only one who thinks the Northeast having contracts lower than in 2001 is a big deal?
The boom was just getting underway then, that’s an unbelievable slow down.
And
Anon 2:31:51
Japan fought like hell against the deflation, that’s why they had 0 percent interest. Property didn’t sit, it went down. The only thing that allowed them to hike interest rates to a whopping 25 basis points this year was an insanely massive currency inflation that basically had them running the printing press.
They used all those yen to buy dollars in an attempt to drive their currency down, but we were able to put out more debt than they could swallow.
That’s pretty much what is at the core of those great global imbalances guys like Steven Roach keep talking about.
Lindsey
Lindsey:
Japan has a lot of structural problems in it’s banking system and in their government’s and business leaders’ spines. While it’s good to review their situation as a point of reference, drawing parallels to the U.S. Economy is not entirely relevent, despite being helpful.
Am I the only one who thinks the Northeast having contracts lower than in 2001 is a big deal?
I think it’s a HUGE deal.
But is it that buyers in the NE are more aware and sellers are stubborn?
As in a possible “Mexican stand-off”? (Anyone know where that term comes from?)
Or is the Boston market dragging down the numbers?
This should be a HUGE red flag for the media to investigate.
I don’t think it’s any great mystery why sellers are reluctant to lower prices.
If you had the choice between handing over $50,000 to $500,000 versus holding on until the bitter end, what would you do.
Panic has begun to set in…I think all parties agents, mortgage brokers, builders, sellers, etc. get that things have changed, but they’re going to do everything possible to keep prices up as long as they can.
I’m not sure a Mexican standoff is the right analogy. More of a herd defense mentality versus a wolfpack, the weak members of the herd get picked off as they can’t keep up by the wolf pack.
Homeowners who can’t wait will start to get picked off by savvy buyers who know what realistic prices.
JM