From the Press of Atlantic City:
Fewer properties change hands in county as market cools
Nearly 30 percent fewer properties were bought and sold in Cape May County last year compared with 2005, confirming a definite cooling in a previously hot housing market.
More than 8,300 properties changed hands in 2006, a dip of about 3,500 from the previous year.“The market has made an adjustment,” said Cape May County Clerk Rita Marie Fulginiti, whose office released the annual totals Thursday. “Our business reflects the ebb and flow of the real estate market.”
In Cape May County, the housing market is dominated by people who do not live in the county full time.
As the housing market slows down, people have more opportunity to wait and see what housing prices do, said Dr. Richard Perniciaro, director of Atlantic Cape Community College’s Center for Regional Business Research.
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“Right now, you have people waiting to see what happens to prices. A lot of it is a wait-and-see market, more so than Atlantic County, where more people are coming here for jobs, so they have to move,” Perniciaro said.
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Between 2000 and 2005, the number of residences in Cape May County increased 7.7 percent — or twice the state average, according to U.S. Census date figures released in August.But Cape May County, unlike other southern New Jersey counties, saw a 3 percent population decrease in that time period. That data, experts said, provided further confirmation of second homeownership and a trend of baby boomers seeking homes and age-restricted houses in Cape May County.
“When they retire, they’re going to move and redefine the housing market,” Perniciaro said of baby boomers.
In 2004 and 2005, the county reached the high points for the number of properties to change hands, 11,961 and 11,814, respectively, according to data from the Cape May County Clerk’s Office.
From the Boston Herald:
Buyers vs. homesellers: Standoff could lead to recession
How bad is the real estate market?
At a national conference today, Wellesley College housing guru Karl Case will release the results of a five-month groundbreaking survey of the housing market in Boston’s suburbs.
And it’s not happy reading.
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Despite the big drop in sales activity, there was no price implosion.
Instead, average selling prices fell just 6.3 percent.
After seeing the value of their homes soar during days of the real estate bubble, home owners are reluctant to give ground on price. Or, as Case puts it, it’s a case of “sticky” prices common to past market downturns.
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Instead, the drop in home sales activity could be a more serious economic threat, Case believes.
Combined with an already-large drop in housing starts, it could put a measurable dent in the nation’s economy. The housing cool down, in turn, could lead to the loss of 1.4 million jobs by the end of 2008, pushing up the national unemployment rate to 5.8 percent, Case’s report estimates.
All of which is in marked contrast to the predictions of real estate industry organizations, which have been forecasting a big market rebound in the spring.
Still, the Wellesley College professor and nationally respected housing expert was shying away from grand predictions on where home sales and prices are headed over the next few months.
Instead, he is letting his research do the talking.
Such as this telling fact: real estate downturns have contributed to three prior recessions.
That about says it all.
Chip’s Takeaways on Real Estate Housing market booms/busts:
– The housing market is not an auction market and therefore, does not bust the way other markets bust. Sellers will hold out for their asking price, Buyers will hold out for their offer price. There will be resistance.
– Trends in pricing that last for more than one year, tend to last for several more additional years.
– The biggest yield on a house is that you live in it rent-free; its a consumer durable. And you get a tax break.
– There will always be some pain for those who are over-leveraged and buy at a peak.
and finally, how does one know if we are in a housing bubble?
– A tendency to view housing as an investment is a defining characteristic of a ‘housing bubble