Sales of new one-family houses in June 2006 were at a seasonally adjusted annual rate of 1,131,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 3.0 percent (±12.0%)* below the revised May rate of 1,166,000 and is 11.1 percent (±9.8%) below the June 2005 estimate of 1,272,000.In June, sales declined in every section of the country except the West, which posted an 8.2 percent increase after a decline of 7.3 percent in May. Sales fell 11.3 percent in the Northeast and were down 7.9 percent in the Midwest and 6 percent in the South."
The median sales price of new houses sold in June 2006 was $231,300; the average sales price was $290,600. The seasonally adjusted estimate of new houses for sale at the end of June was 566,000. This represents a supply of 6.1 months at the current
sales rate.
June New Home Sales: 1.131 Million Annual Rate (Calculated Risk)
New Home Sales Fall, Record High Inventory (The Housing Bubble Blog)
The median price of a new home was $231,300 in June, which was up by just 2.3 percent from a year ago and was down by 1.5 percent from May. The number of new homes for sale in the US in June 2006 was 566,00 which represents a 24% increase from June 2005 when the new homes for sale stood at 455,000.
Posts
Also, average and median prices have fallen two months in a row now.
ReplyDeleteAnd these prices don't include the large stealth price cuts in the form of free upgrades, closing cost assistance, and spending allowances.
ReplyDeletePer a debate in comments yesterday about how the low end of the market is doing, note that an implication of average price exceeding the median price is that the distribution of sales is skewed right -- a lot of very high dollar sales are pulling up the average, but not the median. (If you replace the richest guy in a room with Bill Gates, median income in the room isn't affected at all, but the average shoots way up.)
ReplyDeleteAll this shows is that there's more action at the top end of the housing marke than the bottom. To show that there's been a *shift* away from low end housing, what you'd really want is see whether (average price)/(median price) has increased as compared to, say, July 2005.
C
To show that there's been a *shift* away from low end housing, what you'd really want is see whether (average price)/(median price) has increased as compared to, say, July 2005.
ReplyDeleteIndeed true.
In the other thread my question for a link of what is normal real estate inventory in months went unanswered. Does anyone have a link? I keep hearing 2 to 3 months RE inventory is normal. Others state 6 or 9 months. Since I have trouble imagining that someone would normally carry two homes fora half a year plus, do educate me.
Thanks in advance,
Neil
Graphs of Census Bureau's
ReplyDeleteNew Homes For Sale
New Homes Sold
New Homes Supply
Neil,
ReplyDelete"Inventory" refers to the number of homes currently on the market. The "months of inventory" figure is derived by dividing the inventory by the number of sales in a given month. This is different from "days on market". There may be 3, 6, or 10 months of inventory, but a specific house may sell in a day.
David,
ReplyDeleteOT: Your "David Lereah Watch" site doesn't allow comments for non-blogger members. I'm pretty sure blogger defaults to that.
Neil,
ReplyDeleteThe NAR (so take this for what it's worth) describes a "neutral" market as one with 5 months of inventory. See Anon above for description of "months of inventory." And yes, many do keep a property on the market for six months or longers. Sometimes they are hurting so badly, they refuse to reduce the asking price. Sometimes they are misinformed. Sometimes they are not serious sellers. Expect to see a larger number of lengthy listings in the months and years to come, as the market declines further.
"Closing a thread due to a potty-mouth real estate agent plays into their hands. They want this discussion stifled. "
ReplyDeleteI hear what you are saying. It is just too much to constantly delete the nasty comments which were popping up every 10 minutes or so on the previous thread.
Neil,
ReplyDeleteYou are asking a very interesting question about who and how defines a "normal" "balanced" "buyer's" etc. market. I, too, have been trying to find historical inventory information and it's tough. The use of inventory numbers/months to characterize a market seems to be found in quotes by various industry experts.
That being said, the market of the last five years has been unusual in many ways to those of us who have been buying and selling over the last 20 years. The sheer luxury of being able to make an offer on a home knowing your own home will sell quickly is rare to my experience.
Once upon a time in a galaxy far far away (aka the 80's & 90's)bridge loans, tapping home equity, piggybacks, and the dreaded home sale contingency were typical techniques used by those of us trying to buy and sell at the same time. Companies transferring their employees often bought their homes.
That doesn't happen anymore.
I'm a long term NoVa resident who was transferred to Ohio last summer and is being transferred back. My company's deal is that their relocation company will "buy" our house only after we have brought a buyer to the table and all contract contingencies are cleared. We have a 60 day temporary housing standard. They have begun to realize that 60 days may not be nearly enough and we're in negotiations to extend the stay.
So, here I am stuck in Ohio with a house to sell and it is slowwww.
For more information on various buy/sell techniques I've dropped in a quote from an article I recently read. By the way, I HATE bridge loans but.....
"Peter Bell, broker-owner of Balch Buyers Realty in Mamaroneck, said most sellers are willing to negotiate and are eager for offers. "Last year, only about 10 percent of all homes in this area had been on the market for more than three months. Now, at least a third have been on for more than three months. Since more properties are on for a longer periods, you see more price reductions to more reasonable levels.
"Sellers are also entertaining lower down payments and more contingencies in the contract, including delayed closings to allow time for the sale of the buyer's home," Bell said.
One sign of the slowing market is the return of bridge financing, or short-term loans that allow a buyer to close on the sale of one home while waiting on the sale of another. During the heyday of the sellers' market, buyers could comfortably sign contracts to purchase a home before they even put their own property on the market, because they knew it would sell in a matter of days.
Now, as David Moore, a mortgage broker with Concorde Funding in Greenwich, explained more buyers are experiencing a time lag between the purchase of one property and the sale of another. If they have an existing home equity line of credit, they may be able to tap the equity in their existing homes to finance the purchase of another.
However, Moore said lenders would not approve home equity lines on homes that already are on the market. In those cases, the owners may need to get a bridge loan for a term of three to 12 months.
Moore said another option for buyers is a double decker or piggyback loan. The buyer obtains one mortgage for 80 percent of the cost of the property and a second mortgage for an additional 10 percent to 15 percent of the cost. "This way, when they sell their original home, they can use the proceeds to pay off the second mortgage," he said.
In a slow market, Moore said, the key to making deals is creativity."
Homesick
It's getting to be a challenge to find a thread that still is open for comments.
ReplyDeleteSpeak up Anony, we can't hear what you're saying.
ReplyDelete2 cents wanted to know about price ranges in a market. There is a pretty good blog (with very low comment traffic) that has a pretty good program - although when you run PHX is only shows 11K houses.
ReplyDeletehttp://www.paperdinero.com/Inventory.aspx
"Aren't you able to disable posting from this wise-guy's ISP address? "
ReplyDeleteNO!
This post is in lockdown mode.
ReplyDelete