Diana Olick reports on housing data from ZipRealty:
We've been reporting a lot of anecdotal information about life after the home buyer tax credit, but now we're starting to get some numbers. A new report from ZipRealty.com shows:
—The number of homes that closed in May are down more than 5% compared to April.
—Newly signed contracts in May dropped more than 10%, a sign of a real estate drought this summer.
—Internet searches on real estate sites are down 20 percent compared to this time in 2009.
And she quotes Zillow on the overall effect of the home buyer tax credit:
"While temporary tax credits succeeded in lifting buyer psychology temporarily, they essentially shifted demand forward without having a lasting impact on prices or purchase behavior. We expect some payback in the form of decreasing sales after the final closing deadline at the end of June."
The Wall Street Journal has more about the after-effects of the tax credit expiration
here.
Posts
Thank god its all over and we can get back to prices heading to reality again. I love that housing prices chart on the right, all those gains went RIGHT BACK DOWN!! A little tiny blip, just like I said it would be.
ReplyDeleteMRIS stats are out for May.
ReplyDeletePrices in Northern VA are up...again...
Banks are stepping up the pace of foreclosures. More inventory is on its way!
ReplyDeleteSource (actually a source specific to the DC area)? I ask because the only thing I have is realtytrac & their stats note the DC area foreclosures are down 7% YOY.
ReplyDeleteSource is my position with BOA!
ReplyDeleteThen your statement should be revised to:
ReplyDeleteBOA is stepping up the pace of foreclosures. Too bad the other banks are not given that foreclosures in the DC area are down 7% YOY.
"realtytrac & their stats note the DC area foreclosures are down 7% YOY."
ReplyDeleteYou must be looking at April data. May data is out and DC area foreclosures are now down 16% YOY.
Are you guys looking at realtytrac.com???? Cause Im seeing a LOOOOT or red here....
ReplyDeletehttp://www.realtytrac.com/trendcenter/va-trend.html
and here...
http://www.realtytrac.com/trendcenter/default.aspx?address=MD
You guys must be looking at April and May data from 2006?
"Are you guys looking at realtytrac.com???? Cause Im seeing a LOOOOT or red here...."
ReplyDeleteYeah, thats where we are looking too. Its been quite helpful to track this MOM for a good 18 months now, in large part becasue the month after its posted, it isnt archived, and thus its easy to see all that red and assume its just the same as it always was.
However, since I kept the old data, heres what each area did on a YOY basis (expressed in terms of homes per XXX in foreclosure):
Arlington
May 09 1/1076
May 10 1/1169
-7.9% YOY
Fairfax
May 09 1/373
May 10 1/401
-6.9% YOY
PWC
May 09 1/155
May 10 1/263
-41% YOY
DC
May 09 1/950
May 10 1/1052
-9.7% YOY
Mo Co
May 09 1/436
May 10 1/783
-44% YOY
don't mislead people into thinking buying an overpriced home that will cost them 4 times their income is a good thing. They will be a prisoner in their home without discretionary income to enjoy life.
ReplyDeleteArlington 88 foreclosures
ReplyDeleteAlexandria City 100
Fairfax 966
PWC 529
Dc 1,594
Montgomer County, MD 2,473
"don't mislead people into thinking buying an overpriced home that will cost them 4 times their income is a good thing. They will be a prisoner in their home without discretionary income to enjoy life."
ReplyDeleteHow did you get this out of this thread? Simple facts were reported - prices are going up on a YOY basis - foreclosures are down on a YOY basis. Nothing more.
4X income when rates are 5% or less vs. 2.5 to 3x income when rates were 10%.
ReplyDeletePlease 'splain this to me vis a vis affordability.
Try to avoid the "prices will crash" when rates increase unless you have data supporting this. Many here are looking for a long-term home, not a quick sale in a few years.
I do have data supporting prices do NOT crash when rates rise:
ReplyDeletehttp://seattlebubble.com/blog/wp-content/uploads/2010/02/KC-Home-Price_1950-2009-nominal.png
As you can see, when interest rates exploded upwards of a stunning 18% in 1982-83, prices did not crash. Instead they continued to rise on a nominal basis.
A similar thing can be seen on James' house price since the 1970s graph. Interest rates exploded in 1982-83 and prices didnt drop in the slightest.
For the *ss
ReplyDelete"Then your statement should be revised to:
BOA is stepping up the pace of foreclosures. Too bad the other banks are not given that foreclosures in the DC area are down 7% YOY."
NEW YORK (CNNMoney.com) -- Banks are seizing more foreclosed homes even as the number of people falling behind on their mortgages is declining.
Bank repossessions hit a record monthly high in May, according to RealtyTrac, the online marketer of foreclosed properties. Lenders took back 93,777 properties, up 1% from the previous month's record and 44% from the same period a year earlier.
"Try to avoid the "'prices will crash' when rates increase unless you have data supporting this. Many here are looking for a long-term home, not a quick sale in a few years."
ReplyDeleteKeep taking your lithium!
Your following assertion is flawed:
"As you can see, when interest rates exploded upwards of a stunning 18% in 1982-83, prices did not crash. Instead they continued to rise on a nominal basis."
First, home values did not increase 100% - 300% in the period prior to 1982-83. Those values were fundamentally sound. So comparing this bubble period to that time frame is analytically incorrect. Second, when interest rates rise it removes a income-sensitive segment of potential purchasers from different market levels. That is a proven fact.
So don't come on here purporting to have a keen insight on housing. Your self-serving assertions are very flawed!
The only thing I see flawed is, one of two things...
ReplyDeleteEither you guys are full of crap
or
All the charts showing things still falling is full of crap.
"First, home values did not increase 100% - 300% in the period prior to 1982-83. Those values were fundamentally sound. So comparing this bubble period to that time frame is analytically incorrect"
ReplyDeleteTake a look again at the graph of home prices, 2006 - 2009. Have they not fallen substantially? I would agree with you if we were facing 2006 prices but we arent.
I know you want to believe that high interest rates will cause housing prices to crash, but you have ZERO factual evidence that that is the case. Sure a bunch of gurus out there say it, but they have nothing to back their assertions up.
Show me with DATA (either graphically, or tabular) that when interest rates rise, prices of homes that SELL fall. Show me one intance in history where this has happened to home prices in the USA. You will find that there is none.
"Second, when interest rates rise it removes a income-sensitive segment of potential purchasers from different market levels. That is a proven fact."
ReplyDelete100% Correct. Lets look at sales in the DC area 1979-1982 as rates soared.
Sales
1979 23,043
1980 19,527
1981 15,155
1982 12,435
So again, you are right, as rates soared, sales fell off a cliff - no doubt about it.
Now, lets see what happened to prices during this time.
1979 $79,838
1980 $90,744
1981 $100,050
1982 $103,631
Clearly, despite the huge decline in sales as interest rates soared, as I noted in the beginning, prices didnt suffer in the slightest.
"100% Correct. Lets look at sales in the DC area 1979-1982 as rates soared."
ReplyDeleteCould you provide price data for DC from the period of 1990 to 1996?
And would purchases of higher priced homes skew the price data? In other words, if the majority of homes purchased during the high interest rates period were homes valued above the median value, would that contribute to price inclines during that period?
Let me help you because I don't think you would want to share that data with everyone. In fact, it's in your industry's interest not to. Remember what they have told you, stress the positive and do everything to dismiss the negative. Because you are focusing on DC, we will stay with DC. Ready?
ReplyDeleteDist. of Columbia median home values
1940: $78,800
1950: $87,800
1960: $75,900
1970: $81,800
1980: $136,200
1990: $158,300
2000: $157,200
Source: U.S. Census
So tell me, from 1940-1950 prices only climbed $9,000. From 1960-1970 prices climbed approximately $6,000. From 1970-1980 prices climbed about $54,000. From 1980-1990 prices climbed $22,000. From 1990-2000 prices DECLINED $1,100.
So for the 10-year period of 1990 - 2000 prices declined! Could you explain that one? Inerest rates were not excessively high. Actually, interest rates were declining from their highs. Why did prices go down?
"Actually, interest rates were declining from their highs. Why did prices go down?"
ReplyDeleteDifferent anon here. That is probably because the early 1990s bubble. I know this area had a decent downturn where prices bottomed in 1992 and then went sideways til about 1997. Its probably no surprise that they were still recovering from that in 2000.
Do you have the prices for the most recent period (say 2007 or 2008)?
"That is probably because the early 1990s bubble."
ReplyDeleteYep. Plus if thats census data, he is talking about DC proper. At the time, DC was being roiled by the crack epidemic in the early decade. Back then, it was the murder capital of the USA and people were actively fleeing for the burbs and no one in their right mind would move to the city run by Marion "the bitch set me up" Barry. The conditions were so bad back then that most of us here would not move there at any price. If anything, im surprised prices did as well as they did.
As an aside, its nice to see some life in this board again! I love nothing more than to antagonize doomers who cant see a bottoming process right in front of their faces!
"Show me with DATA (either graphically, or tabular) that when interest rates rise, prices of homes that SELL fall"
ReplyDeleteAnon 2:33 PM topped you! He or she showed you where interest rates FELL prices FELL. Someone got faced!
Someone has a reading comprehension problem.
ReplyDeleteThe question was, what proof, if any is there that when interest rates RISE, it causes prices to FALL.
It is not a question of falling rates and falling prices or falling rates and rising prices the operative language, once again is
"Show me with DATA (either graphically, or tabular) that when interest rates rise, prices of homes that SELL fall"
Try again please...
"Its probably no surprise that they were still recovering from that in 2000."
ReplyDeleteSo then would that 8 year period of no price gains be a good measurement for this current bubble period? Will values in the DC area be sideways until 2013 if the bottom was 2005?
"Try again please..."
ReplyDeleteBigger homes were being built with more square footage and that explains price increases during higher interest rates. You need to compare apples to apples.
" love nothing more than to antagonize doomers who cant see a bottoming process right in front of their faces!"
You are not antagonizing anyone. You are making a fool of yourself.
You are not antagonizing anyone. You are making a fool of yourself.
ReplyDeleteIf you are so upset that you feel compelled to respond, even to say "it doesnt bother me" id say antagonization accomplished!
"Bigger homes were being built with more square footage and that explains price increases during higher interest rates. You need to compare apples to apples."
ReplyDeleteYou are undercutting your own argument here. If the assumption is higher rates = higher payments = lower prices, why would people (who presumably are strapped by the relenting pressure of high interest rates) buy bigger and bigger homes?
The point stands. There is zero data (and I do stress ZERO) that suggests higher interest rates automatically equalls lower prices among the homes that sell. If anything, the DATA suggests prices otherwise.
But again im open to seeing the other side of this. Ive trolled many many blogs with this issue and none of them have come up with any data to prove otherwise, but I guess you could be the first.
"The point stands. There is zero data (and I do stress ZERO) that suggests higher interest rates automatically equalls lower prices"
ReplyDeleteI havent been in this argument yet...but what do you call the current prices declining as rates go up then? Is that not data? Look at the chart on the right of this blog...see how prices keep dropping? I think its cute!
what do you call the current prices declining as rates go up then?
ReplyDeleteCurrent prices declining? Are you sure? NVAR reports
2009
July +2.8% YOY
Aug +1.3% YOY
Sep +7.7% YOY
Oct -0.6% YOY
Nov +11.6% YOY
Dec +13.2% YOY
2010
Jan +11.8% YOY
Feb +13.2% YOY
Mar +6.4% YOY
Apr +9.3% YOY
May +7.7% YOY
I love these "declines"!
"When rates rise prices will fall. Like those idiots who professed home prices never fall, the idiot above will be proven wrong."
ReplyDeleteYes, yes, thats it. Keep believing that despite the evidence to the contrary:
http://seattlebubble.com/blog/wp-content/uploads/2010/02/KC-Home-Price_1950-2009-nominal.png
Incidentally, your line of argument above is one of my favorite. First you make your statement (rates rise/prices fall). Second, when presented with evidence that is wrong, you use poor examples to refute it. Third you make an enormous flaw in thinking by saying they were buying bigger houses. Finally when all else fails, you circle round to the beginning and just declaratively say, "when rates rise, prices will fall".
Its beautiful. You were put into check time and time again. Finally when pressed you just stubbornly reiterate your belief - almost as if if you keep on stating it, it will come true. Classic!
I think the last guy missed this chart...
ReplyDeletehttp://mysite.verizon.net/vzeqrguz/housingbubble/united_states.png
ding ding ding, survey says! PRICES ARE FALLING, WHILE RATES ARE RISING!
ding ding ding, survey says! PRICES ARE FALLING, WHILE RATES ARE RISING!
ReplyDeleteRates are at or near near all time lows.
"Rates are at or near near all time lows."
ReplyDeleteNo, they WERE at all time lows when that little tiny blip that you can barely see on the chart I posted. Now they are raising and prices falling. Dont tell me you cant read a line graph silly goose! FAIL, try again! ;)
Mortgage rates near historic lows:
ReplyDeleteMortgage rates were down again in the latest mortgage survey released by Freddie Mac on Thursday. In the latest Primary Mortgage Market Survey, 30 year mortgage rates were down to 4.72 percent for the week ending June 10, 2010, down from the prior week’s average 30 year mortgage rate of 4.79 percent. Mortgage discount points averaged 0.7 points, down from the prior week’s average of 0.8 points. The reason for these near historic low mortgage rates is bond yields fell last week on the weak employment report and mortgage rates followed lower.
http://www.monitorbankrates.com/mortgages/mortgage-rates-near-historic-lows-30-year-mortgage-rates-at-472-15-year-mortgage-rates-at-417-5055
This comment has been removed by a blog administrator.
ReplyDeleteRates fall and prices rise. Rates rise and prices fall.
ReplyDeletehttp://seattlebubble.com/blog/wp-content/uploads/2010/02/KC-Home-Price_1950-2009-nominal.png
ReplyDelete"http://seattlebubble.com/blog/wp-content/uploads/2010/02/KC-Home-Price_1950-2009-nominal.png"
ReplyDeleteThat's one isolated area of the country. Mr. Know-it-all, show me where that happened in all areas. You can't so I won't wait around for your response. You cannot take one area and draw a general conclusion. It's obvious you were not educated at a respectable school. No wonder you are in real estate sales. It's the perfect job for someone who is full of sh*t!
Who is the fool who stated "Show me with DATA (either graphically, or tabular) that when interest rates rise, prices of homes that SELL fall"?
ReplyDeleteWhat he or she doesn't tell you is that during the period prior to the time frame of record high interest rates the mortgage product changed. The most imporant change was the due-on-sale clause. Specifically, assumable mortgages in the 1970s shielded the housing market from higher interest rates. In other words, the buyer assumed the lower interest rate mortage.
Second, creative financing resulted in homeowners being offered buy-downs that deferred payment of part of the home purchase price for a few years, after which, many people hoped, mortage rates would be lower. These two substantial changes softened the blow of higher rates.
Unfortunately, most of the mortgages issued in the last 10 years are not assumable. Although the FHA has recently made these type of mortgages available, the portion of the market that contains these mortgages is very, very small. So, when interest rates rise, markets that have home values with no fundamental correlation to incomes will certainly fall.
The rule of thumb is that you should not buy a home that is more than 2.5 times your income. Those who didn't follow this rule are now losing their homes.