From the Otteau Group:
SUMMER MARKET REMAINS COOL
July was another cool month for the housing market as declining buyer-confidence continued to take its toll on home sales. In July, contract-sales activity declined 11% from the June level and was 25% below the year earlier pace in July 2005. That this slowdown comes in the midst of the prime March-to-August selling season when home sales should still be running hot provides compelling evidence of a market transition wherein home buyers have greater control over final selling prices than at any time since 1991, a 15-year span.From an inventory perspective, the number of homes being offered for sale now stands 67% higher than a year ago. This equates to a 9-month supply as compared to only 4-months last year at this time. It is however encouraging to note that Unsold Inventory increased by only 1.5% in July following a 47% increase over the 1st 6 months of the year, which works out to nearly 8% per month over that period. This moderation, coupled with recent declines in mortgage rates present home buyers with an opportunity window that will likely close once mortgage rates continue their upward climb.
From a price perspective, market conditions continue to exhibit the greatest weakness for luxury priced homes. As shown in the table at right, Unsold Inventory below $600,000 stands at an 8 month supply as compared to 27-months above $2.5 million. This weakness in the luxury market has been developing slowly for several years now and will likely continue for the foreseeable future. As a result, expect the market for more affordably priced homes to be the first to recover.
At a certain point, the metrics become meaningless. Months of supply? Who cares?
Prices are too high, sellers haven’t dropped them enough. Lots of property for sale, but due to high prices, few people buying. Broken record.
We need to see fresh closing data for the “in contract” sales of the last few weeks.
Anyone care to speculate on their characteristics?
Not sure whether this NYT article made it to the readers.
Home for Sale, by Anxious Owner
chicago
i was thinking same thing. but last weeks numbers were nice to see. you can almost feel the desperation/pain of sellers and what they must be thinking ( that their house will never sell) although not too desperate because prices arent plummiting. our beloved bob has the right idea boycot.
questions: does nj association of realtors release numbers if so when?
The numbers are skewed by RE companies. Number of houses originally listed are intentionally reduced. These houses are still being shown to buyers.
Similarly asking price reported on MLS/GMLS is not the same as the asking price the agent communicates with a buyer.
They are all in the game here. Don’t believe all you read is 100% truth.
high end will drive the entire market down.
take a look around– most SFHs built during the past few years are asking $2M+. Builders have not built any non-luxury SFHs (only condos).
there will be real bargains in this segment. builders trying to move inventory, bank foreclosures on builders who are too slow to sell, inheritances where the heirs do not want to pay the taxes, etc.
some of the bargains in this segment will make the non-luxury SFHs start to look even more overpriced
pretty interesting and not seen for over a decade in Hoboken
http://newjersey.craigslist.org/rfs/192108632.html
Looks like the NJAR Q2 data is finally out, I’m not sure when it was released but I didn’t see it mid-week last week.
http://www.njar.com/2006Q2.pdf
Didn’t have much of a chance to look at it yet.
grim
Chicago:
I’ll speculate, but only about my area, and when I speculate, it’s based on info from real people. It helps to be short, chatty and a non-threatening type on walks.
New comps [houses sold July] are down 15-20% since spring for median homes. This is a limited sample due to my limited walking radius.
But this data will not be available in statistics until January.
Pat
Down 15-20% comps? Smell Blood!
Chicago, what about the $379K, one bedroom condo hasn’t been seen for a decade in Hoboken?
Here are some current August numbers, with comparisons from previous years for Bergen County.
Bear in mind, even though there are only 3 days in the month, the August sold number can continue to increase if it isn’t reported immediately. But it looks as if the slow down continues into August.
The numbers mean the following:
Year Avg$ Med$ Sold UnderContract
SFH, Condo, Co-op & Townhouses
1995 $247,620 $216,000 672 612*
1996 $257,598 $215,000 894 701
1997 $266,817 $215,000 902 617
1998 $282,075 $226,000 1029 736
1999 $310,101 $247,500 1087 779
2000 $352,890 $270,000 1018 891
2001 $380,208 $310,500 1138 862
2002 $424,039 $350,000 1109 844
2003 $479,323 $390,000 1140 895
2004 $494,282 $425,000 1066 973
2005 $597,332 $497,000 1301 986
2006 $646,144 $510,000 720 715 as of 8/28
July 2006:
2006 $607,368 $490,000 902 751
Single Family Houses ONLY
1995 $268,468 $230,000 539 458*
1996 $275,882 $230,000 726 563
1997 $288,687 $229,900 730 473
1998 $308,420 $245,000 806 539
1999 $344,744 $274,000 838 588
2000 $398,302 $294,900 768 619
2001 $418,846 $335,000 871 627
2002 $471,731 $380,000 838 611
2003 $530,431 $425,000 865 647
2004 $551,580 $469,000 777 664
2005 $669,531 $539,000 933 688
2006 $727,510 $540,000 536 525 as of 8/28
July 2006:
2006 $677,783 $525,000 665 550
*1995 data may be incomplete as I believe this is the first year this data becomes available.
As this chart illustrates, buy now and you’re a fool:
http://tinyurl.com/e4so5
Rich,
do you see increase in cancellations after the July housing report came out?
Check out page 14 of the NJAR 2Q06 report…Funny how the gap between median income and qualifying income grows when credit tightens! Looks like the mortgage brokers are fudging numbers. $9k difference this qtr vs. $1k difference in 3Q05
>>This moderation, coupled with recent declines in mortgage rates present home buyers with an opportunity window that will likely close once mortgage rates continue their upward climb.
once mortgage rates climb? who says they’re climbing? hedge funds are making plays for a bond market rally which would drive rates lower. i don’t see the long bond moving much above where we are today for the near to mid term so this is an opinion stated as fact statement.
i’m impatiently waiting for the spring market. if inventory explodes and the buyers don’t come out of the woodwork it’s going to get really ugly.
Adjacent to where I rent (border of North and South Brunswick in Middlesex county), I have seen $50K decline in listing price for identical townhouses. 6 months back, a 3 bed townhouse was on the market for $349K. I saw 3 on the market last week for $298K….wonder if any buyer’s are biting as yet?
Prices have to give way to adjust for imbalances…. when is just a matter of time, given the vacuum created by buyers who brought their purchases forward. Can someone create a ‘regret index’ for people who bought in the past 18-24 months?
Rich,
do you see increase in cancellations after the July housing report came out?
I’ll have to play around with that tomorrow to see if I can get a sense of it. I’ll let ya know.
That craigslist posting isn’t Hoboken, it’s Jersey City.
any word on how Khov is doing
with their w.paterson complex.
814 units for sale. what a project.
i understand is an over 55 and its
a 7 year affair.
I dont see them advertised much.
Anon at 8:15, that building is “technically” Jersey City but it’s really so much on the border that it’s effectively in Hoboken – it’s on the Hoboken side of the railroad tracks and one would use the Hoboken Path, trains and stores.
Holy St Joseph statue, Batman. That is a major change in inventory.
Blam!
chicagofinance said…
pretty interesting and not seen for over a decade in Hoboken
http://newjersey.craigslist.org/rfs/192108632.html
8/28/2006 06:00:05 PM
This location is a minumum 10 minute walk from the Hoboken Path or the Newport Path. It seems to be centrally located.
Still way too expensive. Parking adds to the cost. I wonder what the monthly condo fees cost. A gym sounds nice, but that can’t be cheap.
Also, a 1 bedroom condo would really be bad to buy now for me as a 20 something because in a few years when I decide to have kids, I’ll need to upgrade and will then be in upside down mortgage.
It is encouraging to see the prices dropping. Hopefully there will be even better opportunities to be had in the coming months/years.
This post has been removed by the author.
That Hoboken 1-bedroom condo is located technically in Jersey City right next to the NJ Transit railroad tracks. It couldn’t be in a crummier area. They’re also building a new condo complex adjacent to it called 700Grove (www.700grove.com). Take a look at this website—it’s quite comical!
This development gives its occupants a panoramic view of the NJ Transit railroad tracks and, if you’re lucky when you buy your 400K studio, you get to hear the train whistles blow as they come in and out of Hoboken. What a deal!
When you click on “the neighborhood” tab of the website you will hear fancy jazz music and see a tiny-print disclaimer saying the view you see in the website is not the view you get from the units!
To its credit, the Hoboken PATH station is only a 5-10 min walk away.