The housing market in the Washington and Baltimore area had already started declining in fall 2005. Thus the year over year comparisons only represent a portion of the declining housing market.
Northern Virginia (Fairfax County, Fairfax City, Arlington County, Alexandria City, & Falls Church City, VA (NVAR))
- Median Price: $455K
- Median Sales Price YoY: 0%
- Average Sales Price YoY: -.1%
- Total Units Sold YoY: 10%
- Average Days on Market YoY: 82%
- Active Listings YoY: 18%
- Median Price: $265k
- Median Sales Price YoY: 6.0%
- Average Sales Price YoY: 4.3%
- Total Units Sold YoY: 4%
- Average Days on Market YoY: 69%
- Active Listings YoY: 39%
- Median Price: $385k
- Median Sales Price YoY: -3.7%
- Average Sales Price YoY: -3.9%
- Total Units Sold YoY: 18%
- Average Days on Market YoY: 80%
- Active Listings YoY: 20%
- Median Price: $330K
- Median Sales Price YoY: 6.5%
- Average Sales Price YoY: 4%
- Total Units Sold YoY: -20%
- Average Days on Market YoY: 95%
- Active Listings YoY: 83%
Montgomery County, MD
- Median Price: $435K
- Median Sales Price YoY: 2.4%
- Average Sales Price YoY: 1.3%
- Total Units Sold YoY: -2%
- Average Days on Market YoY: 118%
- Active Listings YoY: 34%
Loudoun County, VA
- Median Price: $420K
- Median Sales Price YoY: -10.4%
- Average Sales Price YoY: 0%
- Total Units Sold YoY: -5%
- Average Days on Market YoY: 119%
- Active Listings YoY: 4%
- Median Price: $435K
- Median Sales Price YoY: -16.8%
- Average Sales Price YoY:-15.4%
- Total Units Sold YoY: 3%
- Average Days on Market YoY: 61%
- Active Listings YoY: 16%
- Median Price: $456K
- Median Sales Price YoY: 1.4%
- Average Sales Price YoY: 3.7%
- Total Units Sold YoY: 12%
- Average Days on Market YoY: 86%
- Active Listings YoY: 18%
For more numbers on jurisdictions not mentioned here please go to MRIS Market Statistics.
These numbers are in sharp contrast to what occur ed between January 2005 to January 2006. For example in Northern Virginia (NVAR):
December 06 YoY Median Sales Price: 11%
December 07 YoY Median Sales Price: 0%
That is a turnaround of 11% which goes to show the significant change this market has shown.
On the surface these numbers would seem to indicate a mixed bag with some jurisdictions showing rising and others showing declining median sales price Year over Year growth.
However, if one looks more closely at individual categories one finds that there ha been significant declines in certain subcategories:
Loudoun County,
- Condos & Coops: -18% YoY [From $ 323,438 Average to $264,945 Average ]
- Attached 3br Residential Units: -10% YoY [From $ 323,438 Average to $ 264,945 Average]
Washington, DC
- Condos & Coops: -8.6% YoY [From $ 407,11 Average to $371,9675 Average ]
- Attached 2br or Less Residential Units: -3.7% YoY [From $ 371,293 Average to $ 357,643 Average]
The housing market in the Washington, DC area is in decline. The above numbers are nominal dollars, looking at real dollars (inflation adjusted) the declines are even greater.
The Washington - Baltimore area will not have a spring bounce that will save the housing market from further declines in 2007. In the metropolitan area a declining housing market is a reality.
Posts
"between December 2007 and December 2006"
ReplyDeleteI think that should read January not December.
Thanks,
From MarketWatch.com:
ReplyDeleteS&P launches national home price index
WASHINGTON (MarketWatch) -- A national home price index will be introduced later this month by Standard & Poor's that could provide the most accurate and timely information available.
S&P, Fiserv and MacroMarkets LLC will expand their 20-city Case/Shiller home price index to cover all areas of the country, the companies announced Wednesday. The index will be reported on a quarterly basis, beginning next Tuesday at 9 a.m.
"This index is truly the gold standard for measuring value changes in overall U.S. housing," said Robert Shiller, chief economist for MacroMarkets and co-inventor of the methodology of the index, in a press release.
"An accurate measure of national home values is particularly important," said David Blitzer, managing director of S&P.
The Case/Shiller indexes attempt to overcome flaws in other measures of home prices by comparing actual arms-length transactions on the same single-family home. New homes and condos are excluded.
Median prices for new and existing homes can be affected by the mix of homes sold. For instance, if relatively more homes are sold in high-priced markets, the median sales price would show an increase even though actual value of any particular home would not have changed.
The quarterly price index reported by the Office of Federal Housing Enterprise Oversight also compares price changes for the same homes, but only covers homes with mortgages that conform to Fannie Mae and Freddie Mac limits, currently $417,000 or less. In addition, the OFHEO index includes mortgage refinancings that are valued by an appraiser, not the market.
As of November, the 20-city Case/Shiller index showed home values had increased 1.7% year-over-year. The 10-city index was up 1.3% year-on-year, the slowest gain in a decade.
The latest OFHEO index showed prices had risen 7.7% year-on-year through the third quarter. For purchases only, the OFHEO index was up 6% year-on-year, the lowest in seven years. Fourth-quarter data will be released next Thursday.
The median price of a new home was down 1.5% year-on-year through December. The median price of an existing single-family home was unchanged in the 12 months ending in December.
"
ReplyDeleteThe Washington - Baltimore area will not have a spring bounce that will save the housing market from further declines in 2007. In the metropolitan area a declining housing market is a reality. "
And that change was before the ABX market tanked. Who the heck is going to be able to sell once the sales rate plummets due to down payment requirements shooting throught the roof.
The upgrade market only works if you can sell...
P=price
T=time
dP3/dT3 has gone positive.
dP2/dT2 is strongly negative.
DP/DT is near zero going negative.
Hang on, its a wild ride ahead.
This data shows that the total units sold is still pretty high. Ok... let's see how the data does when unit sales plunge as they will in two or three months. (I'm still in shock at what the ABX market is doing... BBB-, BBB, and now A is getting creamed!)
Got popcorn?
Neil
"The median price of a new home was down 1.5% year-on-year through December. The median price of an existing single-family home was unchanged in the 12 months ending in December."
ReplyDeleteSo, someone who held off buying thinking they were going to lose money through price devaluation ... wouldn't have. Surprise, surprise. Isn't that what Va_Inv and I have been trying to make understood for at least since I've been blogging here? What BHs are confusing is that YES some "homeowners" bought with the expectation of flipping (which in my book makes them shortterm market players and not homeowners) and these folks ARE in trouble because they were counting on big time short term appreciation gains to cover the transaction costs (i.e., buying and selling costs) associated with flipping. Those of you that were going into this with the intention of buying a home to actually live in as a home would have been fine ... Especially considering the "5 yr rule" (i.e., because of transaction costs, if you are specifically planning to move before 5 years, then don't buy ... and don't worry if you're just not sure if you'll be staying ... If you buy and you know those transaction costs are on the line, you'll stay. And all those "just out of college" folks almost without exception fall into the "I'm planning to move/marry/have kids and need a bigger/different place within 5 years.")
Actually, as I reported on my blog last night, MRIS' data for January sales in DC show that while average prices have declined (in general), transaction and dollar volume increased YoY, which may portend that lower prices are beginning to stimulate sales.
ReplyDeleteAnd what would be the inflation adjusted prices for housing today? I'm having trouble understanding the significance of an inflation-adjusted price in February for a sale made in January. It has to be so trivial a difference as to be irrelevant.
Newsflash: These numbers came out 2 weeks ago.
ReplyDeleteI agree with James. I don't trust any of these numbers.
ReplyDeleteThink of it this way. You can have 2 old condo buildings in Ballston. Lets say that in 2005 50 units sold for an average price of $400,000. Come 2006 that same building sells 50 units for $400,000 but a new building next door sells 50 units for $500,000.
This data would say that condos in Ballston are UP over 10% to an average price of $450,000. Even though the old building sales were flat.
When looking at these numbers, watch out for how the data is compiled, and who is the source (ala NVAR). Since you don't make lower priced new constructions, this data always inflates the "average" values upward.
Frank,
ReplyDeleteThe situation you are describing is addressed in Jame's post. The S&P housing index he references seems to take the concept of "what is the current value of the same house/condo" in to account. Looking at the just average and median prices as reported by MRIS is helpful but can be misleading since one can't know if we are looking at an apples to apples comparison or if because of housing mix changes we are looking at an apples to oranges comparison. After all, the homeowner only cares about the value of their particular house and not whether other's existing houses have gone up or down. It's an easy enough concept to grasp when you think about how the "average" house has changed both in terms of where it's located and what amenities it offers over the years. I.e., your grandfather's "average house" in the DC metro area is not your "average house" today. Chances are there were cows grazing on the land back then where your "average house" sits today ... And the "average house" of his day was 1/2 the size of yours ... and lacking in lots of other respects such as the number of bathrooms.
I must say I find it very revealing that whenever anyone presents irrefutable evidence such as James' that flies in the face of the BHs' foregone conclusions, there is dead silence about this evidence on the part of the BHs. It's as if they rather just stick their heads in the sand and ignore any irrefutable evidence that their cherished bubble burst isn't coming ...
"So, someone who held off buying thinking they were going to lose money through price devaluation ... wouldn't have."
ReplyDeleteActually, Lance, I can show you the people trying to sell at a loss today. It's easy to cross-index listings data with assessments data. The people who stayed out in 05 have saved a ton of money by not listening to morons like Lance.
I doubt that Investor was telling people to buy in '05. Investor would have made more of a contribution if she hadn't tried to defend an idiot like Lance.
“I must say I find it very revealing that whenever anyone presents irrefutable evidence such as James' that flies in the face of the BHs' foregone conclusions, there is dead silence about this evidence on the part of the BHs. It's as if they rather just stick their heads in the sand and ignore any irrefutable evidence that their cherished bubble burst isn't coming ...”
ReplyDelete“Lance”, so now you agree with Shiller? Or, you don’t agree but would still like to use the Case/Shiller home price index? Seems like we BH’s have been following Shiller for quite some time, glad to see you coming on board:
http://money.cnn.com/2006/06/16/real_estate/buying_selling/Shiller_weighs_in_on_housing/
- Shiller: Real estate is risky business
Economist Robert Shiller points to several indicators that suggest prices are out of whack.
By Les Christie, CNNMoney.com staff writer
June 16, 2006: 3:58 PM EDT
NEW YORK (CNNMoney.com) - Though U.S home-price gains have slowed, prices still far outstrip fundamentals, according to Yale economist Robert Shiller.
Speaking Friday at a press conference in New York, Shiller, the author of "Irrational Exhuberance" and co-producer of the Case-Shiller real estate indexes, pointed to several measures he tracks.-
don't buy yet, are you trying to say that because someone held off on selling ... and that if they had sold they "in your opinion" would have had to sell for less than they paid, that the index is inaccurate because it didn't capture in its sale data properties that didn't sell? Plainly put, if it didn't sell, it didn't sell for a loss or for a gain ... it just didn't sell. Why would you want to include a "if all the houses that people might have wanted to sell had sold what would they have sold for" element into the index? Obviously, if everyone wanted to sell at once, then they'd be giving the places away. But that's not what has happened... and the fact that the market has signalled to would-be sellers that they need to wait, simply means that everything is working correctly ... Your "what if" doesn't belong in the calculation of the index for obvious reasons. The bottom line fact is that exact houses that did sell sold for what they were bought for. They held their value and the BH canard about a "depreciating asset" is just that.
ReplyDeleteLance! Dear Lance! The one bedroom condo in my area in Chevy Chase has gone down around $65,000 to $75,000 from the height of the bubble. Those units used to sell for $95,000 some four years ago and at the height of the real estate frenzy sold for $356,000!! This huge appreciation was/is unwarranted and prices have come down. Someone has to be out of his mind to pay these prices. God only knows how bad all this will end. I suggest you read more Lance!
ReplyDeleteLance-
ReplyDeleteIn real terms, almost all those prices were down, even if they are accurate. Official inflation was somewhere between 2.5% and 3.5% last year. Only P.G. County and Baltimore City really beat that (and Fairfax maybe in the average category).
So if you really wanted to buy a DC/Baltimore area house last year, but instead stuck your money in a CD last year, you would be in a better position to buy right now than a year ago.
A Redskins fan
On the spring bounce point, I am really curious to see what will happen. (This whole thing is like a soap opera for me).
ReplyDeleteThe weather has been bad for a few weeks now, but also I think a lot of would-be sellers are going to try to hold out a year or more. I have overheard conversations saying this in the grocery store and at the mall. I don't think sellers have reached the point yet where they are like "I can't bleed any more- what can I do to get out, even if it means a big loss or BK?"
I predict moderately higher inventoru this year than last year, with a price stalemate resulting in lower sales at slightly lower prices. Next year will be the year when sellers start to crack. But I could be wrong, and I am really curious to find out what will happen.
A Redskins fan
Lance - "They held their value and the BH canard about a "depreciating asset" is just that."
ReplyDeleteJanuary 2007 -
MRIS Zip Code 22201:
Average Sold Price:
2007 - 472,542
2006 - 629,094
negative 24.89 %
Median Sold Price:
2007 - 391,500
2006 - 530,000
negative 26.13 %
MRIS Zip 20005:
Average Sold Price:
2007 - 456,946
2006 - 474,881
negative 3.78 %
Median Sold Price:
2007 - 391,750
2006 - 420,000
negative 6.73 %
Care for more, Lance? Or have you taken enough of a pummeling? Or do you just want more punishment?
You seem like the kind of guy who keeps getting crushed because you can't admit you were wrong.
I hereby award Lance the Bubblemeter Randall "Tex" Cobb prize for continually getting brutally beaten without ever giving up.
Lance and others focusing on statistics--
ReplyDeleteWHY do you argue over something that is ALWAYS produced by someone with an agenda? Numbers can be skewed to "prove" anything.
What about using your OWN powers of observation. Look at all the wild incentives, and the fact that condos in particular but even houses are selling at MUCH lower prices at all, or they are NOT SELLING.
But then, why argue with Lance? It's like arguing with a brick wall, or religious fundamentalist--a lost cause.
Keith,
ReplyDeleteWhy are you posting MRIS data when the whole point was that because this data doesn't look at "same house" sales it doesn't account for different housing sales mixes and does far less to reflect real resale value than the S&P index that was referenced. And the S&P index clearly showed that resale values had stayed constant ... experiencing no drop whatsoever. Was this "by accident" on your part ... or, again, a refusal to deal with reality?
Folks, before you start arguing with Lance, understand his psyhology. The guy spending days and nights on this blog is simply scared. He bought RE sometime around the top and he is not trying to out-argue you, he is simply trying to convince HIMSELF that he was right. He reminds me my 6-yar old son when in denial - no matter what argument you throw, he is not listening etc, etc. Judging by the level of his arguments Lance is not an economist, nor tax specialist, nor whatever ... what a joke...
ReplyDeleteIf you want qualified info, visit Mish Weblog or Jim Puplava's and follow the links - there is an ocean of good information and analysis. Fine non- economist take on financials and RE is Charles H. Smith blog (compare it with Lance's bubbling :-)
David - good job!
Cheers!
David,
ReplyDeleteNo collapse. Looks like you need to find another hobby (you know, a hobby besides hoping for other people to suffer misfortune).
"The Washington - Baltimore area will not have a spring bounce that will save the housing market from further declines in 2007. In the metropolitan area a declining housing market is a reality."
ReplyDeleteHahah, this is what you said last year and you were wrong. You'll be wrong again this year.
Re: Spring Bounce
ReplyDeleteBy way of disclosure so nobody accuses me of being a realtor- I'm on the bubble head side of the fence, and I agree with Thornberg who said that "whatever your house is worth now is about what it will be worth in 2011" but---
I have noticed that things have really started selling quickly here in McLean. There had been a number of houses that had been on the market for >8mo. All of them have gone under contract in the last couple of weeks. This is very surprising to me. I had followed asking prices on several down from ~790K to 699K. I'm very interested in finding what they ended up selling for.
I suppose it is inevitable that they would find the right price at some point, still I'm surprised that I am seeing a pronounced uptick in activity. In the end, I suspect that this is a short-lived rally given the implosion of the sub-prime mortgage market and pricing that remains at unsupportable levels. Still, it is worth noting.
If only price devaluation was the only "risk" associated with home ownership. The fact is that buying a home - even when appreciation is occuring - typically takes a few years to "break even" once someone considers the closing costs, the interest on the loan, minor renovations, the new paint, furniture, taxes, condo/homeowner's association fees, etc. People like to say stuff like "I bought in 2000 for $150K and sold for $350K in 2004 - I made $200K." Or they reference how their parents bought for $50K in 1972 and sold for 10 times that last year. And point to that as "proof" that they "made" $450K. This is such a fallacy - if they actually added up the interest, and all the $ over the years that went into repairs, upkeep, rennovations, etc., their "investment" would be not be the incredible venture they thought.
ReplyDeleteI am NOT saying that over time homeowning does not beat out renting. It should. But, as one of my favorite financial experts says "When people tell me their home is the best investment they ever made, it is usually the only investment they ever made."
here's one on craigslist Lance will like almost 500k for a 1BR in Arlington...come on Lance rationalize your way out of this one...the guy paid 450k for it in Aug 06
ReplyDeletehttp://washingtondc.craigslist.org/nva/rfs/283943143.html
Hey David --
ReplyDeleteDidn't you promise us that we'd be in a recession by now?
Hey "recession?".
ReplyDeleteYou might want to check out Bubbles Greenspan, who just said a recession was likely before the end of the year.
Anonymous said...
ReplyDelete"here's one on craigslist Lance will like almost 500k for a 1BR in Arlington...come on Lance rationalize your way out of this one...the guy paid 450k for it in Aug 06
http://washingtondc.craigslist.org/nva/rfs/283943143.html"
Anon, There's absoluting no rationizing the pricing here since it's more than what you can pay ... and NOTHING can reaonably be priced more than what you can afford without sacrificing all the other good things in life! I think you should wait for the bubble to burst and buy it for pennies on the dollar! Good luck!
Greenspan fears recession - report
ReplyDeleteFormer Fed chief warns that U.S. economy nearing end of growth period.
February 26 2007: 9:06 AM EST
NEW YORK (CNNMoney.com) -- Former Federal Reserve Chairman Alan Greenspan warned Monday that the economy may fall into recession by the end of 2007, according to a published report.
Greenspan told a business conference that it's difficult to forecast the timing of recessions but that it was "possible" that one could occur later this year, the Wall Street Journal reported.
The former Fed chief, who spoke to the conference by satellite link, said the U.S. economy has been growing since 2001 and that the economy cycle is nearing an end, according to the newspaper.
"When you get this far away from a recession, invariably forces build up for the next recession, and indeed we are beginning to see that sign, for example in the U.S., profit margins ... have begun to stabilize, which is an early sign we are in the later stages of a cycle," the Journal reported him as saying.
Greenspan also said the global economy looks to be stable and that both the U.S. and world economies are more resilient than before, according to the report.
recession? said...
ReplyDelete"Hey David --
Didn't you promise us that we'd be in a recession by now?"
http://biz.yahoo.com/ap/070226
/hong_kong_us_greenspan.html?.v=4
Greenspan Warns of Likely U.S. Recession
Monday February 26, 8:34 am ET
Alan Greenspan Warns That U.S. Economy May Slip Into Recession by End of Year
HONG KONG (AP) -- Former U.S. Federal Reserve Chairman Alan Greenspan warned Monday that the American economy might slip into recession by year's end.
He said the U.S. economy has been expanding since 2001 and that there are signs the current economic cycle is coming to an end.
It appears to me that there is a lot of smug talk on this thread that is attempting to mask fear of those who, I assume, bought houses in the last few years and are scared to death that they made a bad decision. The key indicators of these posts are from people who anonymously post trite quips and delusionally believe that they have contributed to the debate, or that wishing will make it so. Hope in one hand, crap in the other, and see which one fills up first.
ReplyDeleteFrom my perspective, I think that many people, on both sides of the bubble issue, are expecting things to move quicker than they actually will. It took several years for the conditions to build that created the run up in prices, the run up lasted longer than could be sustained, and the ride to a more sustainable level is going to be a long one as well. People seem to have forgotten lessons painfully learned in the tech boom. The NASDAQ closed over 5000 in 2000. It dropped to about 1,2500. Seven years after the peak, it is hovering around 2500. But the housing market moves much slower than the stock market. One reason is you can't day trade a house. Flipping is the nearest equivalent, but even that takes months from contract to renovation to close. But the arbitrage is gone, folks. Even the most optimistic prognosticators do not expect housing increases to outpace inflation in the next couple of years.
I always thought that the run up in the last few years was fueled by fundamentals: demand out pacing supply. Excessive demand, through creative financing and speculators, exacerbated the market movement beyond sustainable levels. And it is going to take a while to correct.
There are houses out there that are priced right and are selling quickly. The "good" houses, that have nice lots, locations, finishes, and the like will continue to sell quickly. They always do. It is the pieces of crap that are on the market that are overpriced, with sellers demanding what they saw their neighbor get two years ago, that could make the problem better and worse. This will increase demand for the "good" houses, pieces of crap will become cheap again (relatively speaking) because the supply will grow, arbitrage will once again exist, and the cycle will begin again. This is not going to happen in one spring home-buying season, or in one year.
I find it humorous that people who used MRIS to gauge how much their house is worth, and how much they price it on the market, now say that the statistics are suddenly flawed if they show a decline. No one statistic will tell the whole story, and this blog and others like them do a great job at showing the limits of data. But those who simply say this stat or that stat is unreliable, and therefore the reverse conclusion is true, are fools at best and intellectually dishonest cowards at worst.
So if you have something to say, by all means say it. But don't waste our time with mindless, unsupported drivel in a feeble attempt to allay your well-justified fears that if you bought in the last couple of years, you probably paid too much for your house.
At least in DC, multiples are back with a vengeance. Personally, I was hoping the cooling market would continue, but not to be. Inventories are at the lowest levels in 5 months - even in Loudoun. It seems the buyers have stayed on the sidelines long enough. This is typical and is often called a business cycle. Perhaps a better name for this blog is Housing Cycles! Just like the so called bubble...nice try though.
ReplyDeletehttp://money.cnn.com/2007/02/26/news/economy/greenspan/index.htm?postversion=2007022609
ReplyDeleteFormer Federal Reserve Chairman Alan Greenspan warned Monday that the economy may fall into recession by the end of 2007, according to a published report.
An Excerpt from Today's Wall Street Journal:
ReplyDeleteSubprime Game's Reckoning Day
Risky Lending Fallout
Threatens to Spread;
Uncertain ARM Strength
By KAREN RICHARDSON and GREGORY ZUCKERMAN
February 27, 2007; Page C1
The worst may be yet to come for mortgage lenders. And that could add to investor nervousness.
Shares of companies that specialize in lending to riskier borrowers or offer unconventional loans have tumbled because of concerns over how rapidly these mortgages are going sour.
If these so-called subprime borrowers continue to have problems paying their debts, the lenders that target them likely will have to boost how much money they set aside for bad loans, cutting into their bottom lines. That could mean even lower stock prices.
There also is a concern that if the real-estate market remains cool, some borrowers with better credit histories might also begin struggling to make payments on certain popular, but unorthodox, mortgages. These types of loans allow borrowers to skip monthly payments, carry low short-term teaser rates or don't require detailed financial documentation. If that happens, companies such as BankUnited Financial Corp. and Countrywide Financial Corp. could suffer.
Home price slump continues
ReplyDeletehttp://money.cnn.com/2007/02/27/news/economy/homesales/index.htm?postversion=2007022710
The median price, the price at which half the homes sell for more and half sell for less, is now down 8.5 percent from the record high reached in July 2006.
anon 9:40
ReplyDelete"Perhaps a better name for this blog is Housing Cycles"
Sorry but five months doth not make a cycle. When you see YOY decreases in inventory or they stay the same then you have an indicator not proof just an indicator that things are starting to stabalize.
And actually if you look at housing cycles they are typically 18 year cycles (sometimes more sometimes less) not 1 year cycles. Hmmm 98-05/06 yeap 7/8 years so we still have prob. another 8 years left before it's truly a great time to buy.
Lance,
ReplyDeleteMore support that sub-prime lenders were not, in fact, making sure that borrowers could afford the highest adjustment of their loan terms:
http://www.washingtonpost.com/wp-dyn/content/article/2007/02/27/AR2007022700593.html
It's scary when you look at the complete list that Freddie Mac is going to clamp down on. (The last 2 paragraphs in particular.) You mean they weren't doing this before?
My $0.02.
Greenspan also said he has seen no economic spillover effects from the slowdown in the housing market.
ReplyDelete"We are now well into the contraction period, and so far we have not had any major, significant spillover effects on the American economy from the contraction in housing," he said.
www.washingtonpost.com/wp-dyn/content/article/2007/02/26/AR2007022601351.html
Lance said...
ReplyDelete-Greenspan also said he has seen no economic spillover effects from the slowdown in the housing market.
"We are now well into the contraction period, and so far we have not had any major, significant spillover effects on the American economy from the contraction in housing," he said.-
http://money.cnn.com/2007/02/20/news/
companies/bc.homedepot.results.reut/index.htm
Housing market hits Home Depot profit
The No. 1 home improvement retailer says earnings in the fourth quarter plunged 28% as sales at its retail stores fell.
February 20 2007: 11:38 AM EST
ATLANTA (Reuters) -- Home Depot Inc. posted a 28 percent drop in fourth quarter profit Tuesday as the weak U.S. housing market depressed sales at its retail stores.
Heh..."no spillover". I think yesterday demonstrated the importance of the "so far" modifier.
ReplyDeleteGreenspan also said he has seen no economic spillover effects from the slowdown in the housing market.
ReplyDeleteNot yet. It is not reflected in the GDP yet. As consumers stop using their houses as ATMs, as credit lending tightens, the economy will slow and likely end in a recession.
Yesterday's stock market crash was just an example. Expect the stock market to correct downward as the economy inexorably runs towards a recession by year end, and housing starts taking more of a beating than it already has.
Lance I suggest you get a new hobby.
Looks like the "condo glut" won't be as bad as expected since so many condo conversions and new projects have shifted to rental.
ReplyDeleteA large portion of condos in the new Rockville Town Square could never sell, so they've shift to rental apartments in the past couple of weeks. Half of The Chase will be rental, The Joule in Arlington is apparently going rental, The Morgan in North Bethesda went back to rental, White Flint Station is going to a rental/buy mix, etc.
"Looks like the "condo glut" won't be as bad as expected since so many condo conversions and new projects have shifted to rental.
ReplyDeleteA large portion of condos in the new Rockville Town Square could never sell, so they've shift to rental apartments in the past couple of weeks."
If the absolute size of your glut goes down because people underestimated the demand for condos, the relative glut (i.e. supply beyond demand at current prices) can still rise. At the very least, the relative glut is likely at least the same.
Anon 4:15 said:
ReplyDeleteLooks like the "condo glut" won't be as bad as expected since so many condo conversions and new projects have shifted to rental.
Perhaps, but conversion of condos from for sale to for rent does little to increase demand for condos, because the conversion simply turns a "condo glut" into a "rental glut" and the costs of renting, all things considered, becomes less than buying. Although there are less condos, there are also less buyers. The problem is that developers over built and speculators over bought.
Yeah, any time now things are going to come crashing down. Any time now.
ReplyDelete