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Monday, May 15, 2006

Inman NewsBlog

Inman News (real estate) now has a blog, and it's pretty good. A recent post asked:
How is the housing market in your area?
Is it a buyers' market?
How long is the average home staying on the market?
Are sellers lowering their prices? How much?
What, if anything, is slowing the market?
Are you bearish or bullish on the housing market for the rest of the year?
The replies were interesting, and here are a few quotes:
Buyer's market in Marin County, California, especially high-end where things are selling 75 percent on the asking dollar.
Bad press, high interest rates and rising stock market is hurting expensive homes here.
...
Buyer's market in Palm Beach County, inventory is 'sky high' and prices are slowly starting to reduce. I've seen appraisers getting skittish and more buyers running into getting financing probs.
...
SE PA

Buyer's market, for sure here. I've seen several ads by agents "Buyers Wanted! Call Us!"

Four months ago, we found nothing decent in our median price range. Now, there are at least 50 moderate listings in our school district in the MLS alone, not to mention all the FSBOs we saw today driving around. Many reductions.
...
Pittsburgh has been classified a buyers market for years, but my impression is that there is alot of money flowing into several niche markets: historic homes in good neighborhoods; fixer uppers; and new developments where the taxes aren't quite as high as Allegheny County.
...
In Northern Virginia, Loudoun County is experiencing one new ratified contract for every three new listings. In some neighborhoods with high inventories, prices are coming down almost a hundred grand from the high $6oo's to the high $500's.
I still think that we will see an uptick in sales in many areas in the late spring and early summer, because the truth is that there are some much better deals out there than there were last year. It will take a while for the full impact of the resets to hit. On the other hand, condos seem bad almost everywhere. Condo building projects are in trouble in quite a few areas in the US.

The Telegraph carried an amazingly pessimistic outlook on the real estate slump's impact on the US economy this weekend. I think they have overstated the impact, but I may be wrong, so I include it for your skeptical reference:
The US economy peaked in January and is tipping into an unstoppable "bust" whether or not the Federal Reserve halts its cycle of interest rate rises, Lombard Street Research has warned.
...
"The real US hard landing starts now," said Charles Dumas, the chief global economist. "It's going to be a long grind for two or three years, not as bad as Japan but going in that direction." The price of new houses in the US has been tumbling for five months at an annualised rate of 18.4pc, while mortgage applications are down 20pc.
...
Lombard Street Research said it expected at least four quarters of zero growth but warned that the downturn could snowball into a full-blown slump.

"We were here before in 2001, but this time the US cannot resort to huge tax cuts and extra borrowing to keep consumption going," he said.
I can't fault their numbers, and I do believe a recession is coming. But I don't think I would characterize it as a "bust" under any circumstances. The lenders are going to take it in the kisser, for sure. No way can their losses work out to be less than six hundred billion considering all the home equity lines and second mortgages out there. Yet the economy is still strong, and there are people sitting on money who will pop back into the market as soon as a significant drop in home pricing rolls through.


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