From the National Association of Realtors:
November Existing Home Sales (PDF)
From the AP:
Home sales gain slightly in November
Sales of existing homes managed to eke out a small increase in November but the price of homes sold fell for a record fourth consecutive month, a real estate trade group reported Thursday.
The National Association of Realtors reported that sales of previously owned homes rose 0.6 percent in November to a seasonally adjusted annual rate of 6.28 million units. That followed a 0.5 percent sales increase in October and marked the first back-to-back sales gains since the spring of 2005.
The slight increases in sales were not enough to halt a slide in home prices. The median price for an existng home sold in November dropped to $218,000, down 3.1 percent from the price a year ago. It was the first time on record that sales prices compared to a year ago have fallen for four straight months.
From Marketwatch:
Existing-home sales rise 0.6% to 6.28 mln units
Sales of U.S. existing homes rose 0.6% in November, to a seasonally adjusted annual rate of 6.28 million, the National Association of Realtors said Wednesday.
Inventories of unsold homes fell 1%, to 3.82 million, representing a 7.3-month supply.
…
Sales are down 10.7% in the past year.The median sales price fell, year on year, by 3.1% to $218,000.
Sales of single-family homes rose 0.2% to a 5.52 million annual pace. Single-family-home sales are down 10.2% in the past year.
Condominium-unit sales rose 3.1% in November to a seasonally adjusted annual rate of 757,000. Condo sales are down 13.6% in the past year, while median prices are unchanged at $224,600.
Last month’s sales rose 0.6% in the Northeast, 0.8% in the West and were unchanged in the Midwest, the NAR’s data showed. Sales fell 1.6% in the South.
Do sales figures include forclosure/auction sales?
Only if those foreclosure sales were listed and sold using a Multiple Listing Service (MLS).
Existing Home Sales is based on a sampling of MLS data. The numbers are estimates, not actual counts.
jb
i’m all ears on excuses/missing data/conspiracies on this further news that the housing market is bottoming out.
No regional breakdown released?
looks good, 7% down in the last six months :)
waters,
A regional breakdown is available in the NAR PDF linked above.
The Northeast saw a 4.5% YOY decline in sales of existing homes, median prices saw a decline of 2.2%.
Single family homes in the Northeast saw sales decline 2.5% YOY, and median price declined 4.5% YOY.
Condos/Coops in the Northeast saw sales decline 8.7% YOY, and median price increased 2.3%.
Will the 10Y yield break through 4.70% today?
jb
Richard Says:
June 29th, 2006 at 6:32 pm
“Apparently the chorus of voices predicting this collapse and the attention they received from the media, have played a role in bringing the market to it’s current state……as always perception becomes reality!
um, really? you think it could more to do with something actually tangible like affordability? idiots.
We have reached that “affordability” level? What market fundamentals changed for you that your bullish on housing?
Is it the fact that you went from renting to not only purchasing a home but also investing in real estate?
Richard Says:
June 27th, 2006 at 7:19 pm
it’s simple. the latest statistics in the northeast show 70% of homeowners couldn’t afford to purchase their house given today’s prices. that my friends is unsustainable.
This has changed?
Rich
Thanks, JB!
James,
I know the 10 yr. yield is loosely tied to the 30 yr. fixed but why such an interest?
Home Sales Rose 3.4% Last Month, mostly for new homes.
http://www.nytimes.com/2006/12/28/business/28econ.html?ex=1324962000&en=8a3f911c4192e736&ei=5089&partner=rssyahoo&emc=rss
Prices are coming down. Sales are between 2003 and 2004 levels. In the NE they are at or below 2002 levels. Unadjusted US sales are down when comparing to last month and year. Based on the unadjusted numbers I dont think sales have bottomed out just are not declining at an accelerated pace. Prices are between 2004 and 2005.
This spring we should see inventory break 4 million units and 8 months of inventory. In addition to the inventory, continued media coverage of declining prices should allow us to get some good prices this spring.
REUTERS: Florida’s overbuilt condo market starts to fizzle
By Jim Loney
MIAMI, Dec 28 (Reuters) – On a piece of prime bayfront property near downtown Miami, weeds climb the steps of the sales office for Onyx 2, a planned waterview condo where apartments were to sell for $500,000 to $2,000,000.
A sign reads “For Sale. Land, plans and permits for Onyx 2. Includes fully equipped sales center.”
Three blocks north, the land on which a glassy loft-condo called “Ice” was to rise lies idle. A realtor’s Web site says: “This project has been canceled and will not be built.”
Developers have pulled the plug on some of Miami’s most anticipated condominium developments, a sign the city’s sizzling, speculator-driven condo market — where prices of many apartments doubled or tripled in a few brief years — has finally chilled.
“This market was too good to be true,” said Lewis Goodkin, a Miami economist and real estate analyst. “But it was a market fueled by speculators, so it wasn’t a true market.”
City officials say 15 condo projects, representing nearly 1,900 units, have been officially pulled from the waning market. But analysts say the numbers are much higher when you consider the rest of Florida’s overbuilt condo market.
Miami’s building boom, the biggest in the city’s history, is far from over. Construction cranes dominate the skyline, as they have for years.
The city of Miami alone still has more than 77,000 units, in nearly 300 projects, under construction or in planning.
But the “for sale” signs are not the only warnings of a fading market.
Statewide sales of existing condos dropped 31 percent in October from the same month last year, according to the Florida Association of Realtors. Median prices fell 2 percent.
In Fort Lauderdale, sales dropped 21 percent in October.
The seller of a Miami Beach waterfront one-bedroom dropped his asking price from $445,000 to $400,000 to $370,000 in a matter of weeks.
POSTER CHILD FOR OVERBUILDING
“We’re starting to see projects being canceled almost on a weekly basis,” said Jack McCabe, chief executive of McCabe Research & Consulting of Deerfield Beach.
Miami was considered one of the most speculative markets in the years-long U.S. residential real-estate boom. Analysts said up to 80 percent of sales at some condo projects were to speculators who intended to quickly resell, or “flip,” the units.
Elie Mimoun, sales director of Midtown Miami, a $1 billion-plus redevelopment of a blighted former railroad yard north of downtown, said the softening represents a natural shakeout of speculators.
“The market is now keeping out the crazy people,” he said. “I think if the economy stays the same, the worst is behind us.”
Midtown Miami, a key cog in the city’s redevelopment plans, is a 56-acre site where developers plan to build more than 3,000 condo units, office space, and some 600,000 square feet of retail shops. Of the nine planned condo buildings, three are under construction and another breaks ground in February.
Midtown’s developers offered part of the project for sale this year for $375 million, which some took as a sign they were looking to escape a faltering market.
But Mimoun said the developers were simply trying to find a financial partner and “there was never a question of getting out completely.”
Mimoun and other optimists believe the unusual demographics of this Latin-flavored city will keep the Miami market strong. About 20 percent of his buyers are Europeans whose spending is bolstered by a strong euro, and 13 percent are South Americans, traditionally eager consumers of Miami real estate.
But Goodkin said rising building costs, hurricane-fueled homeowners’ insurance hikes and property-tax increases caused by exploding prices have made Florida increasingly unaffordable.
“You have to have people buying units to live in. Who are the speculators going to sell these units to?” Goodkin said.
Several years ago, McCabe began mustering funds, or “vulture” capital, to buy apartments when the bubble burst. But he has not yet begun buying and said it may take 5-10 years before prices bottom out and begin to rebound.
These numbers are extremely preliminary as we still have the remainder of today and tomorrow and agents will still be entering data next week for December.
For Bergen County ONLY, here is the NJMLS average & median price along with the number of homes sold and number under contract in December (12/1-31) for the past 11 years. This is for residential SFH listings; this does NOT include Condos/Co-ops & Twnhs.
Year Avg$ Med$ Sold UnderContract
1995 $255,370 $210,000 550 335*
1996 $265,510 $210,000 511 384
1997 $280,948 $211,000 654 412
1998 $287,281 $224,000 685 518
1999 $326,463 $249,500 617 381
2000 $361,174 $282,000 577 353
2001 $415,826 $320,000 538 435
2002 $490,473 $383,000 598 414
2003 $490,249 $390,000 678 479
2004 $551,835 $455,000 683 472
2005 $649,047 $500,000 528 398
2006 $649,866 $510,000 431 388 as of 12/28/06
And here is the same data for Condos/Co-ops, Townhouses ONLY.
Year Avg$ Med$ Sold UnderContract
1995 $170,456 $152,500 135 110*
1996 $157,664 $127,500 151 93
1997 $169,574 $149,000 163 117
1998 $173,921 $155,000 227 158
1999 $198,511 $176,900 214 155
2000 $212,531 $178,000 266 127
2001 $240,783 $189,000 197 165
2002 $283,812 $250,000 229 172
2003 $313,139 $259,900 271 188
2004 $356,790 $315,000 311 212
2005 $488,079 $443,100 370 285
2006 $401,127 $340,000 181 133 as of 12/28/06
And here is the all inclusive data (SFH, Condos/Co-ops, Townhouses).
Year Avg$ Med$ Sold UnderContract
1995 $238,635 $193,500 685 445*
1996 $240,911 $188,000 662 477
1997 $258,728 $198,000 817 529
1998 $259,065 $205,000 912 676
1999 $293,512 $230,000 831 536
2000 $314,271 $255,000 843 480
2001 $368,909 $291,000 735 600
2002 $433,248 $342,000 827 586
2003 $439,673 $369,000 949 667
2004 $490,810 $416,000 994 684
2005 $582,724 $480,000 898 683
2006 $576,301 $468,000 612 521 as of 12/28/06
*1995 data may be incomplete as I believe this is the first year this data becomes available.
SFH Only
1/1/2000 – 12/31/2000: $371,299 $281,000 6,669 7,086
1/1/2001 – 12/31/2001: $402,781 $315,000 6,712 6,957
1/1/2002 – 12/31/2002: $457,456 $360,000 7,092 7,358
1/1/2003 – 12/31/2003: $501,658 $399,000 7,287 7,680
1/1/2004 – 12/31/2004: $565,882 $450,000 7,632 7,962
1/1/2005 – 12/31/2005: $649,841 $510,000 7,294 7,650
1/1/2006 – 12/31/2006: $680,985 $515,000 5,945 6,849 as of 12/28/06
“i’m all ears on excuses/missing data/conspiracies on this further news that the housing market is bottoming out.”
I never get excited, either way, with month to month #’s, what is important is yoy/trend. Or as Wells Fargo,Mr.Kovacevich states; I’m paraphrasing, it’s much worse out there than is being reported.
i’m not bullish on housing but i’m not bearish either. the market has been saved by wall street bonuses, haven’t you heard?
>>This spring we should see inventory break 4 million units and 8 months of inventory. In addition to the inventory, continued media coverage of declining prices should allow us to get some good prices this spring.
the first part of the statement is quite plausible. in terms of good prices that’s subjective and depends on who you ask. still i don’t see it single digit declines after an 80-100% run-up any reason to cheer.
monthly numbers aren’t anything to get excited over but we have seen a myriad of data points showing some stability. now whether that stability lasts is another story. of concern to the stability hope is double digit declines in mortgage applications for a 2nd month in a row.
the market has been saved by wall street bonuses, haven’t you heard?
These are the “market fundamentals” you’re going by?
Rich
10Y broke through the 4.7%.
Gary,
Partially for the reason you state, it’s link to the 30Y fixed. However, also as an indicator of the current sentiment of the bond market (both domestic and international). If the long end of the curve swings back to “normal”, watch out.
jb
“the market has been saved by wall street bonuses, haven’t you heard? ”
we have heard of 5 so far in NJ. Are wall streeters buying other parts of the country as well?
in the towns i’ve been watching (nyc commuting towns) i’ve noticed the starter market (up to $650k) is doing far better than the $650k-$850k market. pull up the GSMLS and you’ll see what i mean.
existing home sales make up 85% of the RE market so i take such statistics far more seriously than new sales considering where we all live.
i’ve noticed the starter market (up to $650k) is doing far better than the $650k-$850k market.
I show an drop in Bergen County sales this past month in the $500k – $749k range and an increase in the $750k – over $1M range.
pull up the GSMLS and you’ll see what i mean.
Unless your talking about an increase in listings? The public GSMLS won’t show sales, will it?
Rich
you have to have the RE agent version of the GSMLS to see sold and all other status’. sorry rich i wasn’t looking at bergen i was focused on essex and union (summit, madison, chatham, short hills/millburn, westfield, cranford, etc.)
Rich from 14]
Thank you!
Is it possible for you to graph your data?
#19 Grim,
“watch out” … why?
It’s possible that we could see 30Y fixed rates rise by 75 bps or more.
jb
Grim,
Thank you.
New Home Sales: Northeast Meltdown Continues!
http://paper-money.blogspot.com/2006/12/new-home-sales-northeast-meltdown.html
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.
Richard Said
“still i don’t see it single digit declines after an 80-100% run-up any reason to cheer.”
Well for someone who came out of college a few years ago and just got married and is just able to buy now (in this housing environment), I think 50-100K off is a big deal.
Some co-workers in my age group thought the market would continue to go up in 05 and jumped in. I decided not to, they are now wishing they didnt because they are looking to move up from that 1 bedroom condo and cant without losing money.
Its just a bad time to buy in general, but I have a feeling that inflation will eat up a lot of the gain in equity over the next 5-10 years. Waiting a year or two for 50-100K in nominal price declines has benefitted me. I am now questioning and researching my next move.
Rich In NNJ, some stellar Google work.
Richard writes:
“in the towns i’ve been watching (nyc commuting towns) i’ve noticed the starter market (up to $650k) is doing far better than the $650k-$850k market.”
Funny, I’m watching similar towns, and in many cases houses that were in the $800K range, have recently closed in the $600K range.
I feel sorry for people who bought a “starter” house over $600K — that’s a tremendous amount of money, and only 3 years ago would have bought a substantial home in a nice town.
This mania has ruined so many lives.
>>Well for someone who came out of college a few years ago and just got married and is just able to buy now (in this housing environment), I think 50-100K off is a big deal.
understood though i don’t think you’ll see those declines unless the asking prices are out of touch with reality.
your situation was not uncommon in the past. people used to have to scratch and claw for 7-10 years before being able to afford a house.
Rich I am seeing just the opposite. I have access to the NJMLS and am seeing significant declines in Midland Park, Wykoff, Oradell, Emerson, and Ridgewood. Ridgewood is one of the stronger towns where people are not negotiating in my opinion.
Im not scratching and clawing. I have saved a good sum of money and am looking to put down 20-25% on a 400-450K house after my bonus this year. Buyers have a lot of leverge now in comparison to prior years and prices are coming down 50-100K. The market is not as strong as you think.
all fresh data points to a leveling off in the housing market
Nationally? Regionally? or Locally?
jb
I love those seasonal adjustments in the data. Looking at the actual sales and homes on the market points to inventory going from 7.3 months in October to 7.7 months in November (and sales going from 77K units in October to 72K units in November).
“still i don’t see it single digit declines after an 80-100% run-up any reason to cheer.”
Richard,
I see 10-15% off 2005 highs, closed sales, in my area. Realtors, in my area, are telling me to offer at least 15-20% off 2005, there’s a good chance it will be accepted, their words, not mine. Clot reports some sales of 20% off 2005 in his area. Seneca refers to a recent sale in Westfield at close to 10% off 2002, yes 2002 highs, the next door neighbor!! Thatbigwindow, I think, just bought at close to 20% off 2005,his neighbor which is a smaller house!!! This in BC with a top flight school district.
Deny it all you want,it’s starting. This is just the very beginning of a multi year decline coming. First inventory builds, then prices come down slowly. Complacency, concern, fear and panic. I said from the beginning that there will be buying spurts along the way. The industry’s spin will be the bottom is in. Watch out for the massive bear trap!! Lower highs and lower lows.
By the way, how do you calculate the free Mercedes, 2 years of free mortgage payments, free closing costs, etc…, into your equation regarding pricing?? To me, this makes those so called single digits suspect, to say the least???
……and once again, can you please give me one compelling reason to buy today??? Facts please.
“all fresh data points to a leveling off in the housing market”
Right, we’re heading into a “permanently high plateau.”
http://en.wikipedia.org/wiki/Irving_Fisher#Stock_Market_Crash_of_1929
(Continued…)
Looks like a “leveling off” scenario set to play out:
http://graphics10.nytimes.com/images/2006/08/26/weekinreview/27leon_graph2.large.gif
UnRealtor, #39
Loved the Irving Fisher find!!! Great stuff!!
NJREBear,
Sorry, I really don’t have the time.
ck986,
Rich I am seeing just the opposite. I have access to the NJMLS and am seeing significant declines in Midland Park, Wykoff, Oradell, Emerson, and Ridgewood.
CK986,
I’m seeing price declines across the board also.
But my previous statement has less to do with prices than it does sales. I’m seeing an increase in the NUMBER of sales in the $750 – $1M and greater range as compared to the lower and mid-range in December.
But back to prices, this is probably what slightly raised the December SFH median price in Bergen County.
Kay,
all fresh data points to a leveling off in the housing market
Though you haven’t answered JB’s question I tell you that the NJMLS numbers for Bergen County don’t show a “leveling off”. Number of sales alone are still dropping.
Rich
BC,
You’ll probably enjoy this as well..
http://gold-eagle.com/editorials_01/seymour062001.html
jb
To Richard in #3 and Kay in #35
The only place that is showing stability is the formula designed to show stability, i.e. the Seasonally Adjusted calculation.
Take a look at the PDF JB links to. Through the magic of seasonal adjustments the 8.7% decline from October has become a 60 basis point increase.
I don’t know where you are from, but where I come from, 472K is less than 517K every time. Add in the fact that the YOY also is down and the only stability that is apparent is the steadyness of the decline.
For the record, the “increase” in sales from September to October wasn’t really an increase either, but it was a smaller decline than the one we just saw. With that in mind, it would seem that since the decline is larger than the previous decline it would seem to show an accelerating decline, that’s something I would decline to view as all that positive.
JB,
Thanks!! Quite a few of us are enjoying that one. Different markets, same psychology!!!
Lindsey,
…the only stability that is apparent is the steadyness of the decline.
Well said.
#21 (Richard)
Why, exactly would you consider $650K a starter home?
For that to be a starter home the buyer(s) would have to have an income of at least $150K and it would have to be stable (i.e. if there are two incomes going in, she can’t leave work because after having a baby) for it to not be a disaster.
I really find it bizarre how much people tend to overestimate other people’s incomes. The data just doesn’t indicate that there are all that many first-time home buyers with incomes over $90K.
Realistically the first-time home buyer market has to top out closer to $400K, and that is probably quite a bit too high.
NAR Spin Year in Review
Excerpts from “Existing Home Sales” monthly press release:
This starts to look interesting when you look at it side by side with a graph of monthly sales totals.
January 25, 2006 – David Lereah, NAR’s chief economist, expected the monthly sales decline. “The level of home sales activity is now at a sustainable level, and is likely to pick up a bit in the months ahead.”
February 28, 2006 – David Lereah, NAR’s chief economist, said “In the wake of interest rates peaking in November, I expect we are in a bit of a trough that may be followed by a modest rise and then a general plateau in the level of sales activity.
March 23, 2006 – Existing-home rose in February following five months of decline, indicating a stabilization is taking place in the market, according to the National Association of Realtors®.
April 25, 2006 – David Lereah, NAR’s chief economist, said sales are leveling out. “It’s a good sign to see home sales holding close to the level of a strong rebound in the month before,” he said. “This is additional evidence that we’re experiencing a soft landing. We may see some minor slowing in home sales as interest rates rise, but the market clearly is stabilizing.”
May 25, 2006 – NAR President Thomas M. Stevens from Vienna, Va., said the big run up in home prices is over. “After five years of booming sales, we are now experiencing normal market conditions across most of the country,”
June 27, 2006 – “Overall price appreciation has returned to normal levels as the supply of homes on the market has risen to a balanced range,” Lereah said
July 25, 2006 – David Lereah, NAR’s chief economist, said the housing market is flattening-out. “Over the last three months existing home sales have held in a narrow range, easing to a level that is near our annual projection, which tells us the market is stabilizing,”
August 23, 2006 – David Lereah, NAR’s chief economist, said higher interest rates dampened sales but that price softening is good news for the housing market because it is drawing buyers. “Many potential home buyers have been on the sidelines, some ‘kicking the tires,’ but mostly waiting for sellers to compromise on prices and terms,” he said. “Now sellers in many areas of the country are pricing to reflect current market realities.
September 25, 2006 – Existing-home sales stabilized at a sustainable pace in August
October 25, 2006 – Existing-home sales eased last month, as did the number of homes available for sale – indicating the housing market is stabilizing
November 28, 2006 – Sales of existing homes held steady with a modest gain last month, another indicator that the housing market is transitioning into a more normal market
December 28, 2006 – Existing-home sales continued to recover last month following a rise in October, with the level of sales activity suggesting a turn in the market
Starter homes should support median income and until that happens, many first time home buyers won’t be able to purchase their homes. Until then RE will be in a state of flux (ie declining prices or increasing incomes or stagnant prices for a long long time)
Alright, now I need some one to award me a Phd in Economics so I can head a strategic think tank group on RE. And then I can come on CNBC and repeat the above.
The downtrend is progressing.
10-15% off of $750,000 is a lot greater than 10-15% off of $400,000.
The spring magic Is NOT coming BACK!
BOOOOOOOOOOOYAAAAAAAAAAA
Bob
RentinginNJ Says:
December 28th, 2006 at 1:26 pm
NAR Spin Year in Review
Niiiiice post.
hehehehehe
“It appears we’ve hit bottom,” David Lereah, chief economist of the Realtors’ group, said at a briefing in Washington.
Hehehehehhehe
Take at least 25% off 2005 peak prices
lesson 2:
Never seen a bottom happen when many are calling for one. usually by the time it bottoms they have given up calling for one.
hehehhehehehehe
Take at least 25% off 2005 peak prices
Below is a graph showing active inventory versus closed sales for 2003 to 2006 (YTD). Data is from GSMLS consisting of Bergen, Essex, Hudson, Morris, Passaic, Somerset, Sussex, Union and Warren counties.
https://njrereport.com/images/salesinvoverlay.jpg
Where exactly are we seeing this “bottoming out” or “normalization”?
jb
The green line is also represents the start of the nnjbubble blog.
jb
when reading….
hehehehehehehehehehehe http://www.hotink.com/wacky/dastrdly/
BOOOOOOOOOOYAAAAAAAAAA “half yell”
Take at least 25% off 2005 peak prices
“still i don’t see it single digit declines after an 80-100% run-up any reason to cheer.”
For those of you that feel that a single digit decline is the end of this downturn or that data is pointing to a leveling off, please read the following, on this site in 7/05. This is when Richard was bearish RE!!
Interview with Ken Heebner;
“A significant decline in prices is coming. A huge buildup of inventories is taking place, and then we’re going to see a major [retrenchment] in hot markets in California, Arizona, Florida and up the East Coast. These markets could fall 50% from their peaks.”
“I’m worried that more people will default on their mortgages.Some people got 100% financing for their homes. It made the tech bubble look like a picnic.”
“As housing prices fall more people will be under water, and these people are just going to walk away from their homes. They are going to say, ‘I’m outta here.'”
http://njhousingbubble.blogspot.com/2006/07/interview-with-ken-heebner-from-wsj.html
People seem to like to “see” the data when presented to them in a picture.
And that graph says it all.
If I wasn’t so lazy I’d graph my data as well. Besides I gotta get back to the basement and finish cleaning…
JB,
I’m gonna grab this chance to thank you for the all your hard work on this blog and wish a Happy, Healthy and Properous New Year.
Rich
Great job Grimster!
Saved many from buying at the peak and being a debt bagholder.
hehehehhehehehehe
BOOOOOOOOOOOOYAAAAAAAAA
Bob
Rich,
I’ve plotted your data (NJMLS-Bergen) against my data (GSMLS-Aggregate) and found that they do correlate well.
jb
“Lindsey Says:
Realistically the first-time home buyer market has to top out closer to $400K, and that is probably quite a bit too high.”
I think it’s a bit too high too. I am in that boat of saving towards a starter home/townhouse and will bite when I see something decent in the $275-300K range, and not buy the barns on the market currently.
Even if one considers NJ average incomes of around $90K annual, 3x that income for a $270K mortgage is already a stretch. And its takes a long time to acculumate 20% downpayment on a 90K salary anyway. Add the ridiculous property taxes and it’s downright unaffordable. I try and be a bit conservative and look at a mortgage in terms of one income household. If 2 people are working their butts off just to pay a mortgage, the risk of foreclosure if any one of them is laid off is frightening. I think it’s crazy that a woman cannot have a kid just because she has to keep working to pay the mortgage.
My 1.5 cents…..(adjusted for inflation)
150K cannot support a 650K loan or house, unless all you do is eat ramen noodles all day and watch TV. The parties involved would need to put down 130K which I think for most people starting off is very difficult. After saving a ton I feel bad putting all that money in a house. There are so many better investments. Its too bad that that is the amount needed to make the purchase.
“Economist Paul Kasriel refers to a fairly simple formula: take the dollar value of new and existing single-family homes in 2005 and divide it by the nation’s gross domestic product, the total of all goods and services produced in one year. That gives you a ratio of 16.3 percent.”
“‘That’s off the scale,’ Kasriel said. ‘The ratio has never been that high. The median is 8.4 percent and the previous high, of less than 12 percent, was in the late 1970s.’”
“Real estate prices have been dropping faster than ever before. The NAR said last month that the median price in October for existing homes fell a steep 3.5 percent from October 2005. ‘That’s the largest decline on record since 1968, and the speed of the decline has been breathtaking,’ Kasriel said. ‘It’s just like a straight line down.’”
hehehehehehehe
Take at least 25% off 2005 peak prices
OK I know I’m mathmatically challenged so please help me out. Mr. “Take at least 25% off 2005 peak prices” you can chime in any time. I’m not sure how even 25% off is fair. Look at my example and tell me what you think.
Example house was purchased in 2001 for $135K. Asking price is roughly $360 now. If we use the equation of 5% appreciation a year since 2001 being a “fair price” (pretend there’s no bubble), then the fair price is roughly $170K. That would be a little less then half what the asking price is. If this could be used as a general example, shouldn’t “a fair price” be half of what is asking price these days? Or is this a one of a kind and not to be used an model example?
if i were a betting man would i believe people on this blog versus chief investment advisors for multi billion to trillion dollar funds where many are saying a bottoming out looks more likely? i’ll stick with the pundits who’ve proven their worth in salt until proven otherwise.
Rich In NNJ-
I’ll be more than happy to graph it if you post all the data.
you all keep talking these big anecdotal price declines. when you do, compare the bulk of sales then versus today. i don’t care about asking prices and i don’t care about outliers. a decent gauge would be median price and that shows a small drop nationwide. if you want to cherry pick data don’t dress it up as a trend.
“i’ll stick with the pundits who’ve proven their worth in salt until proven otherwise”
What pundits does Richard speak about?
lostinny,
Did the current owners add any extensions or upgrades to the sample house? If so, you want to apply some increase in overall value for those renovations. Granted, if the current owners have enjoyed the benefit of those renovations for 4-5 years, they can’t expect to recoup the entire dollar value of what they put into the home but some portion of the expenditure is fair.
Its hard to imagine any home worth 135 in 2001 being upgrade by almost 200 grand short of it being a small-scale/partial knockdown.
not overexaggerating, $150k for 2 incomes is quite commonplace whereever i go and hear.
if i were a betting man would i believe people on this blog versus chief investment advisors for multi billion to trillion dollar funds where many are saying a bottoming out looks more likely? i’ll stick with the pundits who’ve proven their worth in salt until proven otherwise.
So what you are saying, Richard, is that you’ll trust someone who has a vested interest in you continuing to put your dollars into that trillion dollar fund, versus someone with no vested interest at all?
jb
>>If 2 people are working their butts off just to pay a mortgage, the risk of foreclosure if any one of them is laid off is frightening. I think it’s crazy that a woman cannot have a kid just because she has to keep working to pay the mortgage.
that’s the reality of today’s environment hence the explosion of daycare, after school care, the changing of the nuclear family, etc. you’ll find that nationwide. it sucks but that’s what it is.
“Take AT LEAST” One size doesn’t fit all.
Any improvements on the house?
Look there are NO bargains in NNJ unless maybe a parent sells you the house….. Even when they come down 25-35% for houses and condoshacks much worse (50%).
Unfortunately, there will always be dopes around you have to compete against to buy and a few lenders willing to lend at stupid terms, but there are much fewer today and in the near future.
this is not a cheap area.
just do not listen to these RE pimps telling you it’s a good time to buy. IT”S not a good time to buy unless you get “At least” 25% off 2005 peak prices at a minimum for a house. The bigger the % drop the better!
IMO even if you get 25% off peak 2005 prices probably will be underwater at some point and little if any appreciation for some time.
good luck to you. It will be difficult b/c so many people’s lifestyle are at risk and will say anything to con you. think for yourself and fight for every single concession. Do NOT trust a realtor. question everything they say. Trust only yourself.
Patience – These greedy bastards will try to pick pocket you anyway possible.
BOOOOOOOOOOOOYAAAAA
Bob
>>What pundits does Richard speak about?
listen to bloomberg and other financial radio stations. i’m not going to compile a list for you.
Sorry, but I love this one.
Anonymous Says(Booyaa Bob):
June 23rd, 2006 at 3:28 pm
The new motto from realtors: “MOTIVATED SELLERS, PRESENT ALL OFFERS.”
What a SHAM!
This is after they Piled on a 5-10% price increasde from PEAK 2005 House prices!
Tell’em NOOOTTING!
Starving realtors will be feuding with grubbing sellers.
Watch
BOOOOOOOOOOOOYAAAAAAAAA
Bob
Richard Says:
June 23rd, 2006 at 3:49 pm
“This is after they Piled on a 5-10% price increasde from PEAK 2005 House prices!
bob you’re absolutely right. i’m seeing this all over and it’s laughable. a few agents have been telling me they can’t even get anyone to look at the houses because the prices are so laughable when in reality the sellers will accept far less than original ask. sellers are stupid. they think i’ll ask real high so i can negotiate down the buyer will think they’re getting a great deal off list. doesn’t work on ‘retail price’ clothing it won’t work here + the comps show otherwise.
Present day…
Richard Says:
December 28th, 2006 at 2:15 pm
…a decent gauge would be median price and that shows a small drop nationwide…
Your answer is four posts above yours in Booyaa Bob’s post:
“Real estate prices have been dropping faster than ever before. The NAR said last month that the median price in October for existing homes fell a steep 3.5 percent from October 2005. ‘That’s the largest decline on record since 1968, and the speed of the decline has been breathtaking,’ Kasriel said. ‘It’s just like a straight line down.’”
Congratulations, you bought a house. Accept the fact that you’re happy in YOUR decision and move on.
Rich
that’s the reality of today’s environment hence the explosion of daycare, after school care, the changing of the nuclear family, etc. you’ll find that nationwide. it sucks but that’s what it is.
Let me get this straight, you are saying that this fundamental shift took place in the past 3 years?
jb
Seneca,
Every change made in the house must be re-done. Everything looks like it was done by the owner, and done poorly. It looks to need at least $50k worth of work to fix what they tried to do or didn’t touch. Oh, I should add it was billed as a 3 bedroom but # 3 is so tiny you can just about fit a desk in there and that’s it. It was probably a hall closet.
Richard Says:
December 28th, 2006 at 2:27 pm
>>What pundits does Richard speak about?
listen to bloomberg and other financial radio stations. i’m not going to compile a list for you.
Blah blah blah…..Lets see you are either a bagholding fool homeowner that paid peak 2005 prices, a grubbing johnny come lately seller, a Sheets RE genius/spec/flipper who bought a dozen condos in FL or a realtor or builder or mtg broker….
so what is it?…
BOOOOOOOOOOOOYAAAAAAAA
Bob
“listen to bloomberg and other financial radio stations.”
I do listen but never heard of a ‘multi trillion’ fund manager. Is this ‘multi trillion’ fund manager one of the 5 who bought homes in NJ using bonus money?
lostinny,
Think of Bob’s 25% off 2005 peak prices as an BSRP (Bob’s Suggested Retail Price).
Manufacturers sells tons of crap to retailers everyday at MSRPs that are then reduced by 40%, 50% or more. Its a suggestion, nothing more, nothing less. Sounds like your example house is a real POS. Don’t even bother with it.
The key to Bob’s suggestion is to focus on comparable sales from 2005, not on current asking prices. Asking prices are marketing tools or total nonsense depending on who you ask. Look for comparable homes that have sold in the past 12 months and make sure you pay something less than that.
Ok..
Enough of the arguing and insult. I reserve the right to delete any or all argumentative comments past this point.
jb
from calculatedrisk-
inventories will most likely fall this month (December) and maybe in January too. That is the typical seasonal pattern as homeowners take their homes off the market for the holidays.
It’s common to see inventories drop around 10% in December. Here are some examples of recent inventory declines:
Nov-03 2,530,000
Dec-03 2,300,000
Jan-04 2,200,000
Nov to Dec Decline: 9.1%
Nov-04 2,480,000
Dec-04 2,214,000
Jan-05 2,147,000
Nov to Dec Decline: 10.7%
Of course this year inventories barely declined and actually rose in January:
Nov-05 2,924,000
Dec-05 2,846,000
Jan-06 2,883,000
Nov to Dec Decline: 2.7%
Currently inventories are at 3.82 million. It will be interesting to see if inventories follow the normal pattern (and drop to 3.45 million or so), or stay high like in Dec 2005.
njrebear,
Here is an XLS that contains the active inventory & sales data from 2003 to today. Source is GSMLS.
https://njrereport.com/files/SalesInvOverlay.xls
jb
thanks jb
Northern NJ typically sees its lowest inventory levels in December, and it’s lowest closed sales volumes in February.
jb
Thanks Seneca. I understand. And I know the house isn’t worth it. I’m just curious in some cases if half the asking price would have been reasonable if there was never a bubble.
njrebear Says:
December 28th, 2006 at 2:15 pm
Rich In NNJ-
I’ll be more than happy to graph it if you post all the data.
I don’t have my data in a spreadsheet. I’m sure I can pull the data off the NJMLS that way but haven’t tried. If I have time I’ll play around with the web site to see if I can collect the data in geek format. I mean in a spreadsheet! (I keed, I keed!)
Anyway, I’ve just been updating a Word doc on a monthly basis to compare to previous months and years along with the latest NAR releases.
Rich
Rich,
Data doesn’t have to be in spread sheets. I can graph it as long as your formating technique is consistent.
NJREBear,
Do you have a Yahoo or Hotmail account?
I’ll have NJMLS access in January when I get my license.
Look for that data to be included in my monthly reports starting early next year.
jb
If you both email me, jamesbednar at gmail.com, I’ll forward the data on.
jb
NJREBear,
And there you have it.
If and I do mean IF he passes… ;-)
Rich
lostinny Says:
December 28th, 2006 at 2:52 pm
Thanks Seneca. I understand. And I know the house isn’t worth it. I’m just curious in some cases if half the asking price would have been reasonable if there was never a bubble.
——————————-
Coming from the head pimp’s mouth …..real estate appreciates inflation + 1 or 2%. so your thinking is reasonable, but the last 5-6 years thru 2005 have been absolutely irrational.
Finished putting together my December estimate. *Very* very preliminary data has December sales approximately 7% down year over year.
The pace of the declines has begun to moderate as we’re now compounding multiyear losses off the peak.
For comparison, December 2005 sales fell 20% year over year. December 2006 is roughly 26-27% off those same peaks.
jb
where I live nominal prices have declined 8% this year. this is according numbers published by local realtors. Factor in inflation and we already have double-digit price declines.
I know I would like to see an epic 50% collapse, but from where I sit, 10% or so in one year is pretty damn good considering that we are not in recession.
Given that transactions have dropped off roughly 25% in the last year as well, we can assume that the houses that are selling are likely the nicest of the lot. So the price declines that are registering likely understate the decline, I think.
Finally, I agree with Richard that $150,000+ household income is not uncommon.
Median income families simply do not buy houses in nice areas near NYC. Several months ago I compiled a list of towns where median household income was $150k or above. There are over 30 such towns in NY, NJ and CT, and this does not even count all of the high income families that live in NYC and other large cities such as Hoboken, Stamford, and JC. The point is that the median number does not capture the fact that the income distribution in the NYC metro region is shaped like a barbell, with lots of really poor people and an abnormal number of rich people.
Bottom line for me is that double digit price declines in an area with a ton of money sloshing around means that RE is worth a look in 2007.
Just to clarify, Northern NJ sales, for the usual counties, via GSMLS.
Please understand my estimation technique involves the use of dice, a twister spinner, and a ouiji board.
jb
I am not sure where I read this, but it said there’s a 70% chance of a recession in 2007.
I am trying to find the source – has anyone else seen it?
Also, from an academic point, how does one calculate the odds of a recession?
There is a place in Westfield that is currently sitting a bit above it’s 4% appreciation trendline (based on the prior sale in the mid-1980s). Given that it is currently over 2 months on market, a sales price of 5-10% less than asking would be appropriate. If it closes in that range, it would be on or below it’s 4% appreciation trendline. That is 4% nominal (not inflation adjusted) appreciation.
jb
RentLord,
http://www.financialsense.com/fsu/editorials/wagner/2006/1010.html
http://www.federalreserve.gov/pubs/feds/2006/200607/index.html
http://www.fdic.gov/bank/analytical/fyi/2006/022206fyi.html
http://www.ny.frb.org/research/current_issues/ci2-7.pdf
http://www.clevelandfed.org/Research/Com2006/0415.pdf
JB – MLS # in Westfield?
“i’ll stick with the pundits”
Laughing my *aa off!!! The pundits??? In 2000, analysts rated over 6,000 different stocks. Out of these the “pundits” gave a sell rating on less than 1%!!! Go ahead and listen to the pundits, why weren’t you listening to them 6 months ago??? Or were they different “pundits”??
I’ll listen to Ken Heebner, Post #57. Sorry, he is not a pundit, only the most successful real estate mutual fund manager on the street.
I’ll listen to the Economist; 6/16/05
“According to estimates by THE ECONOMIST, the total value of residential
property in developed economies rose by more than $30 trillion over the
past five years, to over $70 trillion, an increase equivalent to 100%
of those countries’ combined GDPs. Not only does this dwarf any
previous house-price boom, it is larger than the global stockmarket
bubble in the late 1990s (an increase over five years of 80% of GDP) or
America’s stockmarket bubble in the late 1920s (55% of GDP). In other
words, it looks like the biggest bubble in history.”
The pundits??? Yikes!!!
That’s laughing my *ss off!!!
“if i were a betting man would i believe people on this blog versus chief investment advisors for multi billion to trillion dollar funds where many are saying a bottoming out looks more likely? i’ll stick with the pundits who’ve proven their worth in salt until proven otherwise.”
Aren’t these the same experts who took a bath on dot-com stocks?
To all the “Pundits”;
Any feedback is greatly appreciated;
http://www.idorfman.com/Charts/
Thanks Rich. JB i sent you an email.
These markets could fall 50% from their peaks.”
Does everyone on this blog agree that 50% is the worst-case scenario? Or does anyone think prices can go down more than that?
JB – MLS # in Westfield?
Not until I drive by and decide if I want to lowball this one. I’m not sure if I want to be Richard’s neighbor just yet. :)
Anyhow, I’ll provide this one instead.
MLS # 2304392 – Westfield, NJ
Original List $537,000
Current List $519,000
Days on Market: 152
Purchased: 3/7/2006 for $515,000
Commission is 5%, so if it sells for asking, the sellers will lose about $25,000. However, given it’s been on the market for 152 days, I can’t see it selling for that price. I think this one would sell quickly in the $480k range right now, but that would be a pretty steep loss to take.
jb
Does everyone on this blog agree that 50% is the worst-case scenario? Or does anyone think prices can go down more than that?
I’m pretty bearish on NJ real estate, but even I’m not grim enough to think we’re going to see 50% nominal declines, even as a worst-case scenario.
jb
Rich
You can get that info under statistical reports>allmls>solds – not back as far as 1995 though.
KL
JB and others,
Could you suggest me a lowball price on this listing – MLS# 707486. This is in a nicer part of the town, good schools, close to highways. The owner paid at the top of the bubble a price of 375k. The first time I saw this house in an open house about 3 months ago. Still in the market, owner hasn’t budged a penny on the OLP. A comparable unit is under contract, not sure what was the deal, but that was in the market asking 369k.
Thanks for your help!
Grim,
re: MLS # 2304392 – Westfield, NJ
You’re probably aware, but has one bath. Decent place overall, though, good neighborhood and convenient. Don’t know the layout, but maybe a half bath could be added.
The seller got caught on this one as he bought in March and then turned around and put it back on the market in June or so. Don’t know what happened, but I don’t think it was a flip that flopped. Been occupied the whole time I’m pretty sure, and I believe it still is.
Even in Westfield, there are a growing number of properties that are being shown empty (sorry, richard).
That’s near that dismal swamp area isn’t it?
“Commission is 5%, so if it sells for asking, the sellers will lose about $25,000.”
JB-#107,
…………and add in closings costs, buy and sell, and the NJ realty transfer fee. These will probably add up to approx 15-20K. How about a 40-45k haircut at their asking??? Not to mention any $’s put into the property.
More on “Pundits”;
In Israel, free men and women are every day demonstrating the power of courage and faith. Back in 1948 when Israel was founded, pundits claimed the new country could never survive. Today, no one questions that. Israel is a land of stability and democracy in a region of tryanny and unrest.
Ronald Reagan
Synch 106:
A long time ago on this blog, I put in a forecast for 50% / 1999 plus nominal.
I’m still with it.
Wouldn’t everyone enjoy a new predictions for 2007?
Also, I went back and read some economic forecasts from 04-05. A few seem to be panning out. Any comment?
http://www.itulip.com/housingbubblecorrection.htm
Nasdaq says it will be closed Tuesday in honor of former President Ford; NYSE announcement expected. More soon.
http://www.itulip.com/housingbubblecorrection.htm
Thanks, that was depressing.
I know a few people who had to move to New Jersey from Houston for work and foreclosed on their homes in Houston in the process. This was back in the 80s.
BC Bob, that statement in #114 is essentially correct today.
UnRealtor,
I agree. However, I was only trying to address what the legend, Ronnie, had to say about “pundits”. I was not attempting to make a statement about the great country of Israel.
Pat,
Yikes! that link to itulip is as bearish as you can get. some choice quotes, though. I like the one about McMansions being turned into multi-family rentals.
There’s a $1 million McM sitting empty in my ‘hood now, just sucking up the utility and tax bills. It is even more tasteful in some ways, which is probably why it hasn’t sold! Does have two garages, maybe I can rent one with my half of the house? that’d be nice.
If the economy does slip into recession next year, we could be in trouble. The author makes some good points, some of which have been argued here, but a 10-15 year correction seems extreme.
Still, my inherent pessimism tells me something is up. Just can’t put my finger on what. I am starting to believe a 7 – 10 year decline starting from 4Q 05 might be in the cards. I hope not. The repurcussions would be massive.
“ABN Amro Holding NV, the largest Dutch bank, will cut about 900 jobs in North America, including positions at Chicago-based LaSalle Bank, after posting its first drop in quarterly profit in more than four years.”
“Mortgage Sale?”
“The bank in October reported that third-quarter operating expenses rose 16 percent, outpacing a 13 percent increase in revenue, in part because of costs from its takeover of Italian lender Banca Antonveneta SpA last year.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=aHHMVVD.71V0&refer=home
>James Bednar Says …
>Partially for the reason you state, it’s link to the 30Y fixed. >However, also as an indicator of the current sentiment of the >bond market (both domestic and international). If the long end >of the curve swings back to “normal”, watch out.
…
>James Bednar Says:
>It’s possible that we could see 30Y fixed rates rise by 75 bps or >more.
>jb
Grim — Sorry to follow up belatedly on this. But I have no idea what this means. If 30Y fixed rates are going to rise precipitously (is 75 bps precipitously? …I have no idea) doesn’t that have radical implications for housing affordability? If fixed rates are going to rise dramatically, don’t I want to jump in from the sidelines and buy soon, given that a big hike in interest rates will cut into affordability?
As Desi Arnaz would say, Please ‘splain yourself.
yrs in naivite ~ Cass
Oo…Cassandra hits on the next false rally point of 2007.
Also, I know this has been touched on before in this blog, but how do we know that average or even mean prices YOY have the significance that we think they have?
A house is not a widget or a TV or a car. The price of each house (existing rather than new stock, that is) is unique and not fixed and highly contingent upon upkeep and upgrades. Thus, if housing prices go down x percent YOY, how do we know whether you are getting a much better house (or, for that matter, a much worse house) for x percent less? And, just to be clear, I am not talking about sales incentives like a brandnew BMW in the driveway.
Again, apologies for my naivite. But thanks in advance for any forthcoming tutorials.
~ Cass
Check out RedBankgreen for a classic case of flip and flop, right here in “Hip City” NJ.
http://www.redbankgreen.com/redbankgreen/2006/12/neither_flip_no.html#more
If the bears are right, then there will be a good amount of work for psychiatrists counseling people who lost a good portion of their hard-earned savings in the housing slump.
This is really going to sound stupid. But are the 30 mortgage rates affected by any changes the Fed makes to rates. Why does it appear that rates have been falling? Also why grim or anyone, did you state above that rates me be going up what would make you believe that? Any guess on what the rates may be? (only interested in 30yr fixed)
syncmaster,
“Ask an economist to define a “bubble” and you expect a mathematical answer including such terms, perhaps, as “intrinsic value,” annual rates of return, and various ratios. Shiller admits he doesn’t have a short, simple definition and then goes on to say that defining a bubble “is similar to the way psychiatrists define a mental illness, that is, it involves a list of symptoms.”
“Indeed, to hear Shiller describe a financial bubble it sounds like a disease. “It’s a social contagion,” he says, “An epidemic whose mode of transmission is word of mouth. It’s emotional.”
http://www.foxnews.com/story/0,2933,166561,00.html
crash,
To make it simple, the fed only controls the short end of rates. Changes in the fed funds rate will reflect this. Longer term rates, key off the 10 year, which is controlled by the market. Guess on rates???? There is a huge disparity on the street regarding the ffr, ranging from 4.25 to 6.00, currently at 5.25. The long end???? Let the pundits clash with that one. By the way, there’s never a stupid question.
Thanks BC Bob. This may sound crazy but i would actually like to see an increase in mortgage rates because i would hope that it would significantly affect the prices of homes. I would like to buy a house for cash (in $500 range)but i need a 4 bedroom home and that is very difficult to find in that range. i really do not want a mortgage because we do not make alot of money. We just happened to sell our house in 2005 because we couldn’t afford it. We do not want to make that mistake AGAIN!!! So we are going to downsize to something more affordable. yes we are currently renting, you know its not so bad!
BC Bob #128,
Thanks for the link. Very interesting article. I liked this part especially. It really sounds like he is saying ‘bubbles’ are a natural part of capitalism:
… while others are quick to point to historically low mortgage rates as the key ingredient sparking the unprecedented rise in residential real estate in recent years, Shiller dismisses this as “minor.” Instead, he says the driving factor is “a change in the way we relate to society. I think we are living in a capitalist world right now.”
He defines this is one where “you have to live off what you make, where everyone owns things, deals in markets, people are incentivized by the profit motive. I’m a fan of it as long as we have social insurance to protect people against the vagaries of capitalism. The more people think like business people, the more advanced our economy becomes.”
Housingcrash –
We have a friend who did exactly what you did. Downsized from a $800,000 McMansion at the peak into a large townhouse (just him, wife and teenage son who is never home), paying cash.
He couldn’t be happier, he did the same thing with his business and says he is practically stress free.
From MSNBC.com
http://www.msnbc.msn.com/id/16381406/
Vote: Is worst over for housing?
Make your opinion heard !!!
Also why grim or anyone, did you state above that rates me be going up what would make you believe that?
I didn’t say rates were going up, I said if the long-end of the yield curve unwinds back to what would be a “normal” position, rates on the longer-term mortgages would ratchet up to match. This is really just a statement of the obvious, not any kind of prediction or revelation.
jb
crash,
There are many like you that are either ready to buy with cash or will put a significant amout down, hoping that rates go up. You say you don’t make a lot but want to buy a 500k house for cash. Kudos to you!! Just be patient. This[prices] will unravel at a slow pace[chinese water tortue], actually I’m very suprised at the changes in just one year. I did same as you, sold the end of 2005. Can’t believe the freedom of renting. Actually starting to like it, no visits to Home Depot in a year!!!
I’m glad my folks sold out of the tristate area in 2003, they left some money on the table but they made a serious gain ($50k -> $700k over 30y) and they won’t get stung by the bust. New smaller house in upstate NY (no income tax on teacher pensions) with cowtown property taxes paid for in cash and ready access to local farm goods. I’m glad they took my advice back then.
Happy New Year!
Gigantor,
Great story!! Congrats to you/your parents. You never go broke by taking profits early!!
BC bob
im curious as to when you think you may buy a home again. My husband and I did alot of soul searching since we moved from our McMansion in Nov of 2005. We realized that life is sooo different when you do not have that “monkey on your back (BIG DEBT)”!! We were very fortunate to make alot of profit,we walked away with high $500 in cash in our pockets, however my husband is a carpenter and what sold the house is all the “exquisite craftmanship of the trim and woodwork”. But you know after “arguing” everyday about MONEY, we say NO MORE!!!! We sold it and have been so so much happier. We will be happy this time with a simple cape in a GOOD school town and actually be able to have a life again, travel, go out for dinner etc. You know we did the “competing with the Jones thing”, Oh what Hell it was. I have completely changed my philosophy.
So yes the direction of the housing market is very important but it should be to own a home, to be happy and enjoy life not to kill yourself into debt. Sorry to bore you but i have become somewhat passionate about living “within our means”. My husband and I make around $120 a year and you know even living simple its still not enough, oh and yeah to top it off we have FOUR children. So again when does everyone think they will take it to the next level and buy again. Im hoping to by fall of 2007!!
by the way this blog is SUCH an inspiration, keep BLOGGING!!!
housingcrash,
You are not boring me!! I know exactly where you are coming from. Life is too short to spend every day worying about how to make ends meet. It’s easy to get caught up in the me vs. them syndrome.
I don’t know when I will be back in the market. It is too soon to say. If the right deal was to be had??? I plan on starting to look at the end of 07, early 08. I’m not trying to buy the bottom, just want the market to retrace back to its fundamentals. I am only seeking a place to live in a nice area, don’t need to take 3 jobs to pay the bills. Some people work forever to pay for the house. I want the house to work for me. Right now, it doesn’t. I’m perfectly content renting.
I always remember these words from one of my favorites; The Eagles
“Well I know it wasn’t you who held me down
Heaven knows it wasn’t you who set me free
So often times it happens that we live our lives in chains and we never even know we have the key”