[nychiefsfan]

Price it right and it will sell
Home sellers coming down on sale prices

Moderator cut: copyright



Price it right and it will sell | Business | pnj.com

[nychiefsfan]

Housing market hasn't bottomed yet
By Rex Nutting, MarketWatch
Last Update: 12:01 AM ET Jun 17, 2007


WASHINGTON (MarketWatch) -- After upbeat reports on retail sales and consumer prices last week, financial markets' attention will likely turn to a more depressing topic in the coming week: home building.

The data in the coming week "will be a sobering reminder that the housing market has yet to bottom out," said Brian Bethune and Nigel Gault, economists for Global Insight, in their weekly preview.

The economic calendar in coming week is very thin, as the only releases of note are a couple of key housing numbers and the Philly Fed sentiment survey in the factory sector.

The big release comes on Tuesday with the Commerce Department's report on housing starts and building permits.

The depression in the home building sector is no longer news; even Federal Reserve officials seem resigned to months if not years of weak activity. That means "there are no events that seem likely to change the current atmosphere" in financial markets, wrote Tony Crescenzi, chief bond market strategist for Miller Tabak & Co.

Even so, markets often trade off old news, especially on slow news days.
Economists are looking for housing starts to fall about 4% to a seasonally adjusted annual rate of 1.47 million in May from 1.53 million in April. It would be the first decline in four months, an upward blip that's been driven mostly by the weather, economists say.

"We are a bit skeptical of this trend, considering sales are weak and inventories are high," wrote Young Kim, an analyst for Stone & McCarthy Research.

"April's increase was likely an outlier and fundamental factors point to weaker starts activity in the months ahead," wrote Peter Kretzmer, an economist for Bank of America.

Starts have been very unpredictable, falling sharply for a few months only to bounce back and then "jerk right back down," Kim said. But the longer term trend is clearly down: Starts are off 16% in the past 12 months and are off 33% from the peak.

Building permits, on the other hand, have been falling pretty consistently, dropping to their lowest level since 1997 in April. Many economists say the permits figures are more reliable than the starts numbers, because they aren't affected by weather as much and because the sample is more consistent. But the market pays more attention to the starts numbers any way. Go figure.

The economists in our survey expect permits to be roughly unchanged at 1.46 million in May after a 7% drop in April.

Few analysts see any bottom in home building. There were 538,000 new homes for sale at the end of April, including 175,000 that have been completed. That's an overhang of about 200,000 new homes, said Kim of Stone & McCarthy.

There are lots of older homes on the market as well. At the end of April, the realtor group said 4.2 million older homes were for sale. The recent increase in foreclosures and delinquencies is putting more homes on the market.

In the meantime, sales have slowed and are down 11% year-on-year.
The immovable glut of supply will meet an irresistible decline in demand, as lenders tighten their standards and more buyers get priced out of the market with higher interest rates. The average rate on a 30-year fixed loan rose to 6.74% last week, the highest in a year and more than a half percentage point higher than in March.

Buyers who can afford the higher interest rates may be deciding to hold off on buying to see if prices will fall further.

Faced with these market realities, the builders are a gloomy group. Their housing market index matched a 16-year low of 30 in May and could slide further to 28 in June, economists say.

The home builders will report on the June figures on Monday at 1 p.m. Eastern.

Housing market hasn't bottomed yet - MarketWatch

[firemed]

How long can people take a loss before they have to face the fact its a LOSS. While it is understandable why borrowers became caught up in the belief that house prices always rise, lenders are supposed to know better. Why was the industry willing to make loans that were workable only if properties appreciated?



The News-Press: Real Estate (http://www.news-press.com/apps/pbcs.dll/article?AID=/20070617/RE/70617009/1075 - broken link)

[nychiefsfan]

Originally Posted by firemed

Why was the industry willing to make loans that were workable only if properties appreciated?

Now that home values are depreciating, people are even moreso stuck with what they bought until the market rebounds.

Yanno what's ironic? People complain about the taxes on their $250k home, but I bet there's a bunch of 'em that are trying to sell their house for a lot more than what it's appraised at.

In essence, some are not happy about the amount of tax that their house is appraised at, but when they're trying to sell it, they think their house is worth a lot more than what it's appraised for.

Go figure.

Imagine if the seller were taxed for anything sold over their assessed value. Do you think that would make a difference on their asking price?

[pianogal]

The graphic is a riot! Thank you for a laugh this morning!

[shariviox]

We left Orlando in 2001 and we are now getting relocated back. Because the prices have ski-rocketed, we can't afford the buy the house back we sold 6 years ago..very sad. It's insame to me that sellers are asking for nearly the same price you'd pay in Boston, SF, etc. But, it doesn't seem to me that sellers have figured out they aren't going to get air astronomical prices...We just came on a house hunting trip over 80% of the houses we looked at were vacant with 'seller very motivated' notes on listing..but, after 200-300+ days on the market, most houses hadn't dropped their price. We'll wait and watch the foreclosure list!

[Mike1306]

Originally Posted by shariviox

We left Orlando in 2001 and we are now getting relocated back. Because the prices have ski-rocketed, we can't afford the buy the house back we sold 6 years ago..very sad. It's insame to me that sellers are asking for nearly the same price you'd pay in Boston, SF, etc. But, it doesn't seem to me that sellers have figured out they aren't going to get air astronomical prices...We just came on a house hunting trip over 80% of the houses we looked at were vacant with 'seller very motivated' notes on listing..but, after 200-300+ days on the market, most houses hadn't dropped their price. We'll wait and watch the foreclosure list!

On the homes that said "seller very motivated", did you make any offers?
Sometimes you have to put something out there to see where they are coming from.

A similar home in Boston would run you probably twice as much and 3 times as much in San Fran.

[info please]

Go to the new home builders . lots of great buy's now good luck

[Audacious]

Originally Posted by info please

Go to the new home builders . lots of great buy's now good luck

But don't waste too much time. They have been dumping for awhile now and their inventories are starting to deplete.

[kort677]

Originally Posted by shariviox

We left Orlando in 2001 and we are now getting relocated back. Because the prices have ski-rocketed, we can't afford the buy the house back we sold 6 years ago..very sad. It's insame to me that sellers are asking for nearly the same price you'd pay in Boston, SF, etc. But, it doesn't seem to me that sellers have figured out they aren't going to get air astronomical prices...We just came on a house hunting trip over 80% of the houses we looked at were vacant with 'seller very motivated' notes on listing..but, after 200-300+ days on the market, most houses hadn't dropped their price. We'll wait and watch the foreclosure list!

when you moved away did you buy a home where you wound up? if you did, did that home appreciate in value? if it did, why are you so upset that homes in orlando went up too? homes just about everywhere went up in value since 2001, that is a fact of life you'll have to come to grips with.

like the others said, forget the listing price, make a low offer on whatever you like and you'll quickly separate the real sellers from the pretenders.

I was house hunting and the first thing I asked when shown a home was if the sellers really wanted to sell, and if they did I would offer 20-30% below what they were asking, the house I did buy was priced more fairly than the others that I saw and I still got it about 12% lower than the asking price. It pays to be aggressively proactive.


I wish you luck in your hunt for a house