Reuters reports that "The NAR's chief economist, Lawrence Yun, said the market is 'scratching the bottom,' with sales holding at a deflated rate of around 5 million units for the past several months."
That is just what Yun's mentor the infamous David Lereah said in March 2007: "Sales have hovered for the last four months, scratching bottom and then coming up, scratching bottom and coming up again. We are comfortable this is now the bottom"
That is just what Yun's mentor the infamous David Lereah said in March 2007: "Sales have hovered for the last four months, scratching bottom and then coming up, scratching bottom and coming up again. We are comfortable this is now the bottom"
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publish a real estate magazine in the Washington area. I am not, nor have I ever been, a real estate agent. It is interesting what is happening from my perspective.
ReplyDeleteWe've got more agents wanting to advertise, and willing to sign long term ad contracts, than we've seen in a year. Their inventory of good, well priced, resales - not foreclosures - is low, and they are having difficulty finding good homes for their buyers. And they have a lot of good, well-qualified buyers in hand. Foreclosures are notoriously difficult to buy, and the banks have not put in place a set of SOP to process them.
Agents can put in an offer, or a phone call, on a property and not hear back for weeks. Buyers get tired of having their time wasted, and go for the resales.
Re the market: there is a point where greed overcomes fear. I think we are quite close to that point. I'm seeing SFH in Arlington for under 400K. (Granted, they are small, 1930s crappy cottages, but hey! It's still pretty good.) Down in Port Potomac, a beautiful SFH is under 400K - nice community. PW has been especially hard hit, but that is still a nice community, and I think it will come back.
I sold my house several years back. Honestly, even I'm starting to think that the bargains are such that I might sell my oil stocks and buy one of houses.
To be short: I'm beginning to think that perhaps the worst really is over. My clients are selling houses for a change, and they are even losing out to multiple bids - IF they are in Fairfax or Arlington County.
We live in interesting times.
David,
ReplyDeleteGreat catch!
History does repeat itself. ;)
DC is basically now in sync with the West Coast cities. Ouch!
Got Popcorn?
Neil
Neil, why are you so interested in DC when you live on the left coast?
ReplyDeleteTheir inventory of good, well priced, resales - not foreclosures - is low
ReplyDeletelol
Not True. Inventory is higher YOY.
Boy... sellers must getting desperate. Notice how they never blog to a graph?
Got Popcorn?
Neil
I think I will wait another 2 years for it to keep "scratching the bottom" until prices are realistic
ReplyDelete"Their inventory of good, well priced, resales - not foreclosures - is low
ReplyDeletelol
Not True. Inventory is higher YOY.
Boy... sellers must getting desperate. Notice how they never blog to a graph?"
Hold on a second Neil. Inventory certainly is higher YOY, but are you telling me that NONE of the foreclosures are EVER sold in a way that could contribute to inventory levels? Did you really read what the guy said?
After the trustees sale and equity of redemption has passed, I know for a fact that the REO's go back onto the MLS thus contributing to unsold inventory. I know for a fact too that if you are trying to deal with someone like say Deutchebank - you will be waiting for a long, long time.
The anony has a good point, and an interesting theory - one that shouldnt be so easily dismissed. Maybe if we all had time to check every single County ownership record, and see if they are all REO's we'll graph it like you would but not all of us have that sort of time.
Look - sometimes you have good posts, and I appreciate what you write. However, in many instances like this you pounce on something you think is wrong and then respond with a flippant remark. Well in this case, while this hasnt yet been "quantified" and "graphed" to your satisfaction yet, the odds are very likely you are just flat out wrong.
Neil, why are you so interested in DC when you live on the left coast?
ReplyDeleteBecause he plans to move to DC in a couple of years.
Yeah, he can move to DC and be a little fish in the big Raytheon-DC sea; or he can stay in El Sugundo and be a little fish in the small Raytheon-LA puddle.
ReplyDeleteHow many times is the NRA going to claim bottom?
ReplyDeleteAre you sure Yun didn't say the "Market is scratching its bottom"?
ReplyDeleteHilarious!
ReplyDeleteMaybe they should try something new like "Wiping bottom."
I keep trying to tell the associations to get out of the prediction business.
The funny part is if they say this for 10 years... they might actually be right... once.
Frank
Blog.FranklyRealty.com
David,
ReplyDeletehttp://biz.yahoo.com/bizj/
080228/1597695.html?.v=1
Wells Fargo just took away the punch bowl. Other banks will hold out a little longer, but we're looking at 25% down payments being required for non-conforming loans.
So much for 'timid buyers.' What sales rate can be sustained with those requirements?
Got Popcorn?
Neil
Oil. Record. High. $103. Per. Barrel. TODAY.
ReplyDeleteWatch values in outlying areas tumble and food prices soar.
I love being able to walk to the Metro and to my pick of grocery stores.
Plagiarism!!!!!!
ReplyDeleteAnon on February 28, 2008 10:16 AM said:
ReplyDelete"Hold on a second Neil. Inventory certainly is higher YOY, but are you telling me that NONE of the foreclosures are EVER sold in a way that could contribute to inventory levels? Did you really read what the guy said?"
On February 28, 2008 9:29 PM, Neil said:
"Got Popcorn?"
WELCOME BACK NEIL. So its true, you DO just ignore prior questions & challenges, coming back to offer another hit & run quote. Its funny, I never thought I would have occasion to compare you to LANCE, but it looks like this is a trait the two of you have in common! Congratulations on destroying your credibility!
"Watch values in outlying areas tumble and food prices soar."
ReplyDeleteSo that's only happening in outlying areas?
Bull.
I watched a townhome in Columbia Heights, not a crappy one, a nice area just off 16th St., go for $440k, and it was originally purchased for $525k. Also a nice federal townhome just steps from Eastern Mkt Metro, originally purchased for $628k, went for $470k and change.
Pain. Coming to a close-in neighborhood near you.
If you can't afford the cost of one or two gallons of fuel (13 - 20 miles even in a gas hog SUV) to get to the store, you are too poor for your comments to matter.
ReplyDelete"I watched a townhome in Columbia Heights, not a crappy one, a nice area just off 16th St., go for $440k, and it was originally purchased for $525k. Also a nice federal townhome just steps from Eastern Mkt Metro, originally purchased for $628k, went for $470k and change."
ReplyDeleteI suppose they will next change hands for $100,000K? Will that mark the bottom, or should we all hold out for $50,000?
"If you can't afford the cost of one or two gallons of fuel (13 - 20 miles even in a gas hog SUV) to get to the store, you are too poor for your comments to matter."
ReplyDeleteIt isn't a question of affordability for people who are smart enough to recognize the trend in the first place.
Did you recognize the trend? Do you recoginze the direct correlation between fuel prices, and the price of food, clothing, airline tickets, etc? How about the correlation between fuel prices and the cost of doing business for your employer? If you don't see the macroeconomic trends, you're probably in trouble. People who do see the trends tend to be insulated from the bulk of the pain.
"Pain. Coming to a close-in neighborhood near you."
ReplyDeleteThanks Neil. Glad to see you continuing to drool over DC real estate.
a nice federal townhome just steps from Eastern Mkt Metro, originally purchased for $628k, went for $470k and change.
ReplyDeleteIf that is true, it means smart people are taking advantage of good buying opportunities.
Neil, I think the key to reconciling Anon's observations with the YOY data is that Anon said "good, well-priced" resales. There are a ton of houses on the market in Arlington, but many, if not most, are grossly overpriced and have been sitting on the market for a long time. The days of houses' having significant flaws (such as being located on a very busy street or having inadequate or poorly done updates) but selling for >$1MM, for example, are gone, but many sellers don't "get it." There is also a glut of huge McMansions that in some ways may be "worth" the high prices, but how many people really need 3000 square feet and can afford a $5000 monthly mortgage payment? It's impossible to find a nicely updated 2000 square foot house on a quiet street for under $1 MM. That's just one definition of a good, well-priced house. Your mileage may differ.
ReplyDelete"I suppose they will next change hands for $100,000K? Will that mark the bottom, or should we all hold out for $50,000?"
ReplyDeleteI am not holding out for anything. I have a nice house. I just love watching these dirtbags who drove up prices get wracked. This is hilarious, and its only starting.
Prices will come down in the District, just not as much as places like Woodbridge, Manass, Reston, Centerville, etc. Parts of PWC like Dale City are already posting 60%+ drops. Not even crappy areas of the District are dropping that much.
ReplyDelete"Not even crappy areas of the District are dropping that much."
ReplyDeleteOh, they will. The recession that is coming will blow people's minds - actually, it is already here and it will get much, much worse, even in the "teflon" economy of the District. Game over. Thanks for playing.
Sales may be scratching bottom but prices aren't. I have never been so bearish in my life. However, I am one of the lucky ones. I can afford a down payment of 20%, if needed. I have a feeling that I'm going to buy a great townhouse in Old Town for less than $500,000 in the next few years. Things are ugly.
ReplyDeleteIf that is true, it means smart people are taking advantage of good buying opportunities.
ReplyDelete------------------------
Disagree. At this point in the game it is the seller that is smart - getting max dollar and minimizing losses before it gets worse.
i would like to believe that the real estate market is scratching the bottom, but michigans real estate market is getting worse. we have banks that are setting up guidlines that are not allowing us to close loans with them,,, that hurts on the refi side and it surely wont help on the purchase side,,, right now i dont see any light at the end of the tunnel,,,
ReplyDeleteBubble bursted, prices scratching bottom, etc. are all media driven catch phrases. Ignore them all! Speaking from an investment standpoint, there is no national real estate market, state market, or even city market. Each individual neighborhood in each town, in each city has it's own distinct aspect and should not be grouped in with other markets.
ReplyDeleteHowever, real estate as a whole, is on sale now and investors should be buying now.
www.nationwidepropertyinvestments.com