Interesting DOM statistics. A realtor friend said that she pulled her license from a major realtor who used the tactic of removing a listing and then making a new one to reset the DOM reading for the properties that are 180 days or more. I don't know if she is just pissed and making stuff up or if it is possible that this could happen by those who don't have morals.
Well I can tell you for a fact that the reator I am in contact with reset's the DOM whenever the seller lowers the price. I don't know if that is the correct way or not, but it seems wrong to me.
my company has done business with numerious realtors and builders.(they often teamed up to move properties with the realtor getting a lower commision in return for more business and putting the eventual buyer in a mortgage product that they can't afford - just to move the property!) oh, and there is also the practice of having title companies in the back-pocket, and having inflated appraisals. real-estate is a shady industry - i never knew how much until i was exposed to it.
http://www.breitbart.com/news/2006/07/27/060727164635.phgh289u.html The glut of brand new unsold homes for sale across the United States hit a record high in June, a government report showed, as some economists warned of a worsening market in coming months. The latest data appeared to confirm a cooling trend in the housing market, following a boom and sky-rocketing prices of recent years that have priced many hopeful new home owners out of the market. In recent months, a steady rise in interest rates hikes has prompted a downturn in home buying. Sales of new US homes declined three percent in June to a weaker-than-anticipated annualized rate of 1.131 million units, the Commerce Department said Thursday. The drop in new home sales was steeper that most market-watchers had expected. Wall Street economists had only predicted sales to decline to 1.164 million units. Analysts also zeroed in on the inventory of unsold new homes which leapt to a record high last month. The government said the inventory of unsold new homes on the market rose 0.7 percent in June to a record 566,000, representing a 6.1-month supply of brand new homes at the June sales pace. Most of the unsold new homes are located in the south of the country, the report showed. Apart from a slight one month drop in the inventory in May, the stock of unsold new homes on the market has risen steady over the last 12 months. "Many individuals, who signed a (purchase) contract in what they had believed was a booming housing market, may now be backing out of those contracts," said Phillip Neuhart, an analyst at Wachovia Securities. "Thus, the new home market is likely weaker than new home sales reflects. We expect both existing and new home sales to continue their slide throughout this year and the next," Neuhart said. Some analysts are calling for a bursting of what they see as a property bubble and the report could exert fresh pressure on the Federal Reserve to pause its cycle of rate hikes. The home sales market has been one of the key pillars propping up the world's largest economy, and while inflation is rising, the Fed will not want to jack up interest rates too much and risk a property market crash. New homes sales across the United States have now fallen 11.1 percent compared to June 2005, and as the federal funds interest rate has risen to 5.25 percent. "This was a weak report," observed Patrick Newport, an economist at Global Insight. "Our view remains that sales will continue to slow over the course of this year and into next, because higher interest rates and rising home prices have reduced demand by raising the price of housing," he said. Aside from rising interest rates, American homeowners have also been buffetted by rising energy prices as the economy shows signs of cooling. The government also issued a sharp downward revision for its May figures, to show new home sales of 1.166 million rather than 1.234 million initially estimated. The median price of a new US home meanwhile dropped 1.6 percent in June to 231,300 dollars from the prior month. On Wednesday, a separate report from the National Association of Realtors showed existing home sales fell 1.3 percent.
Rents will not go up to match mortgage payments in san diego. Home prices will drop to close the gap. Take a look at this graph of rental prices in san diego. This is based on polling of people who live at apartments and rate them. Basically flat. Yes, they have gone up a bit, but nothing like housing. The fact is, people who are renting are already maxed out. Rents cant go up because they cant afford to pay any more. A few years ago I was renting a home for $2700/month which is worth about 4 million now. Want to bet the rent is still under $3k there? I guarantee it. Even back when I was renting it, the rent would not coverage the mortgage if you bought it then. Lots of people can only live here with roomates. You can only jam so many people in a house/apartment. The rate at which people are moving out of san diego has been greator than those moving in and has been accelerating for 3 years now. People are throwing in the towel and moving to other states. Only the richest 5%, maybe 3% now can even afford a home here. There is no room left to go up. These crazy loans wont last forever.
Average rent increase is 6% since 2004. Thats lower than inflation. Whoooopiiieee. Rents arent going anywhere because salaries are flat and people are moving out of san diego. Housing will fall back to regular levels over the next 5 years. Were still 2-3 standard deviations out of whack. Although ive seen nice homes on the market as low as $240 a square foot now, that used to be well over $300/sq foot at the peek. Look out below. Slow grind down here we come. A few more TRILLION dollars worth of ARM resets in an area where 85% of people have interest only + arm loans, should do the trick.
This tactic is against Sandicor rules. The agent/broker can get fined pretty good for doing this. Normally, the agent /broker will get a warning in writing and be asked to cancel the new ppty listing and put the old one back on as active. Astute brokers/realtors who truly represent the best interests of clients would do the DD and know that the property was re-listed...but a lot of incompetence going on in the RE biz as you all know. I agree with the concern over growing inventories...I track them very closely for my business and I'll give you an example of a trend: San Diego's Carmel Valley 92130 had a low of 127 homes on mkt in late May of 04 - - - rising to 191 in Sept 04 - - - decreasing back to 129 in Nov 04 - - - the second week of July 06 saw that number at 300 - - - Still, properties priced well are moving and the higher end market of around $1M+ is actually quite robust.
You call $1M+ the higher end in san diego? Thats a 2700 sq foot track home in carmel valley that you could spit on your neighbors roof on from your bathroom window. Upper middle end maybe. Check this out: http://client.aavirtualoffice.com/listnow/property.asp?PropertyID=127391 A sign of times to come. $739K for a 5 bedroom 3090 square feet and a 3 car garage in the heart of carmel valley. $239 a square foot. My buddy has a 3 bedroom thats 2700 square feet with a small 2 garage several miles further from the beach, estimated at $1 million. Thats $370 square foot. See a problem? This gap will close, and it will be to the down side.
It seems that at least in California prices really skyrocketed starting about two years ago, which would roughly coincide with the Fed starting to raise rates again. I wonder how many people decided that it was time to buy before rates jumped higher. Now I wonder how many people are waiting to see if the Fed holds before they buy. If they stop raising maybe we will see more RE activity, at least for a little while.
I don't quite agree with this logic. In general, I think that affordability drives supply and demand psychology. Higher interest rates and tightening of bank lending policies will place a firm roadblock for many who would otherwise buy a new home. I don't think that consumer choice alone dictates the economics of the California market. RoughTrader