From the Associated Press on 11/21/2006 National briefs Home sales fall in former boom areas WASHINGTON -- Sales of existing homes fell in 38 states during the summer, led by steep declines in Arizona, Florida and California, as the once-booming housing market showed further signs of a steep slowdown. The National Association of Realtors reported that sales dipped to a seasonally adjusted annual rate of 6.27 million units nationwide, down by 12.7 percent from the same period a year ago. The declines were the largest in once-booming areas of the country. Sales fell by 36 percent in Arizona; 34.2 percent in Florida and 28.6 percent in California.
some more wood to fuel the fire.... BOSTON (MarketWatch) -- Home-builder stocks rallied Tuesday on lower-than-expected quarterly profit declines, falling Treasury yields and the expectation that the worst may be over for the U.S. housing market. However, many chief executives at home-building and mortgage-lending companies who are in the trenches aren't ready to break out the champagne just yet. Many are saying they're still waiting for signs of a market bottom. Below is a sampling of recent CEO comments on the housing market: "We've got another year to go . . . the rest of 2006 as well as 2007 looks to be a transitional environment." -- Angelo Mozilo, Countrywide Financial Corp. (CFC : Countrywide Financial Corp. News , chart, profile, more Last: 39.72+0.14+0.35% 11:06am 11/21/2006 Sponsored by: CFC39.72, +0.14, +0.4%) CEO, Nov. 14, Merrill Lynch Banking & Financial Services Conference "I'd say we're in the early stages of a declining market. Most of these downturns are longer and deeper than we envision at the beginning." -- Don Tomnitz, D.R. Horton Inc. (DHI : D.R. Horton, Inc. 11:06am 11/21/2006 Sponsored by: DHI24.85, +0.19, +0.8%) CEO, Nov. 14, quarterly earnings call "In most of our markets we are seeing no signs of stabilization yet, and we fear that we have yet to find a bottom. That indicates to us that this correction is going to last maybe longer than others think it may." -- Antonio Mon, Technical Olympic USA Inc (TOA : technical olympic usa inc com News , chart, profile, more Last: 8.58-0.03-0.35% Sponsored by: TOA8.58, -0.03, -0.3%) CEO, Nov. 14, quarterly earnings call "We continue to look for signs that a recovery is imminent but can't yet say that one is in sight." -- Robert Toll, Toll Brothers Inc. (TOL : Toll Brothers, Inc. TOL29.70, +0.05, +0.2%) CEO, Nov. 7, quarterly earnings release "Despite recent references to signs of a bottoming or even the beginning of a recovery, we have not yet seen any meaningful evidence to suggest that a rebound in the housing market is imminent." -- Ian McCarthy, Beazer Homes USA Inc. (BZH : Beazer Homes USA, Inc. Sponsored by: BZH43.82, +0.36, +0.8%) CEO, Nov. 7, quarterly earnings call "The question is how long will this downturn, referred by some as a recession, last? We have seen forecasts from anywhere from 12 months to as long as four years. I don't think anybody is anticipating that it is going to turn around anytime in the next six to nine months. So, in any case, we're looking at a minimum 12-month horizon, and certainly longer than that." -- Alan Levan, Levitt Corp. (LEV : levitt corp cl a News , chart, profile, more Last: 12.23-0.02-0.16% LEV12.23, -0.02, -0.2%) CEO, Nov. 8, quarterly earnings call "I don't think we've seen bottom yet, and I don't see anything that says it's going to get significantly better in '07." -- Bob Nardelli, Home Depot Inc. CEO, Nov. 14, quarterly earnings call. John Spence is a reporter for MarketWatch in Boston.
Housing prices expected to drop more Berkeley economist says recovery will take 3 or 4 years Marni Leff Kottle, Chronicle Staff Writer Tuesday, November 21, 2006 It may take the California housing market three years to recover from its downturn because homes have simply gotten too expensive for most buyers, whose salaries haven't risen nearly as fast as housing prices, an economist said. The median price of an existing home in California will fall 4.8 percent next year and 2.9 percent the year after, Ken Rosen, chairman of the Fisher Center for Real and Urban Economics at UC Berkeley, said Monday during a presentation at the center's annual real estate and economics symposium. That would translate into a drop of nearly $30,000 in the price of a Bay Area home in 2007, based on numbers released last week by the DataQuick real estate information service, which found that that the median price of a home in the region was $614,000 in October. "This is not a one-year event and this is not a six-month event," Rosen said. "It's going to take three or four years for incomes to catch up to housing prices." Other economists agreed. "We are at the beginning of the correction in the housing market in terms of prices," said Stephen Levy, director of Palo Alto's Center for Continuing Study of the California Economy. "The prices now are way out of line with the income and income prospects of people and they are way out of line with the kind of house you can by in comparable western cities like Phoenix or Denver or Portland or Las Vegas." A quicker and sharper decline in housing prices would lead to a speedier recovery by spurring more buyers to enter the market and creating enough demand to soak up excess inventory, according to Levy. The California Association of Realtors predicts a more-modest decline of 2 percent next year and hasn't yet done a forecast for 2008, according to Leslie Appleton-Young, the group's chief economist. She also saw a somewhat shorter period of decline, although she said she doesn't expect to see a dramatic increase in prices for a while. "It's going to take another 18 months or so to work itself out," she said. Appleton-Young, like Rosen, said that sellers who are refusing to drop their asking prices are dragging out the decline. Sellers will need to readjust their expectations -- and lower prices -- in order to get the market moving again, she said. "The period from 2002 to 2005 was unique -- we had an extremely strong market and it was not sustainable," Appleton-Young said. "Sellers cannot add 20 percent on to what their neighbors sold their house for a year ago and expect that to be the market. It's not." The number of buyers who purchased their homes with unconventional loans, or mortgages that start out with extremely low payments and in some cases allow borrowers to rack up more debt than equity, also raise concerns about the stability of the housing market, Rosen said. "Anyone who could fog a mirror could get a 105 percent loan," he said. "And that means anybody." Rosen also pointed to buyers canceling sales of new homes as another factor weighing down the market. Developers often sell homes before they are complete, taking a deposit of typically about 3 percent. Buyers are walking away from those deals in record numbers, swelling inventory. "They had lots of orders with a small down payment -- those really weren't sales at all," Rosen said. "They were options, and many of them have been canceled." The two brightest spots in the broader real estate market are apartment rentals and office space, where rents are rising and the number of vacant units is falling, Rosen said. The vacancy rate for apartments in San Francisco has dropped below 4 percent, Rosen said, and rents have climbed 10 percent. Strong job growth is fueling higher demand for office space. The vacancy rate is down to about 12 percent in San Francisco and is lower for premiere Class A space, he said. "We're growing again in a very sustainable fashion," he said. The outlook Among Ken Rosen's housing comments: The market needs three years to recover from its decline. "It's not over." Prices rose too fast from 2002 to 2005. "Affordability is an issue. Housing prices moved up way faster than income." Office space and apartment rentals are doing better than other parts of the real estate market. "We're beginning to see substantial rent growth." http://www.sfgate.com/cgi-bin/artic.../21/HOUSING.TMP
keep em coming guys....... consumer will be tapped out before you know it....2/3 GDP rides on consumer spending...without their ATM machine where will the consumer borrow from next....
Oh yeah, and income is climbing at such a great rate these days, havent you heard?! Everyones jobs are being shipped offshore and being replaced with low paying service jobs. Yesireeee, income will climb to meet these new over valued home prices in "just a few years". Excuse me while I laugh to death Here is the median san diego household income in the last few years. It actually started going DOWN in 2003! 2000 47,236 2001 46,845 2002 50,384 2003 49,886 The average median detached home price in san diego is now $861,759 Do the math Maybe some other parts of the country will catch up, but SoCal is dead meat on a stick. Its not going anywhere for a decade. ---------------------------------------------------- Other tidbits According to the Federal Bureau of Labor Statistics, in the past year, San Diego lost 15 percent of its manufacturing jobs (which are typically higher wage than retail and hospitality jobs). (San Diego Business Journal, 6/27/05) According to the California Employment Development Department, some of the largest increases in employment over the past year have been in the leisure, hospitality and food service industry. And according to Center for Policy Initiatives, the median hourly wage of such service workers is $8.50. (The Daily Transcript, 2/15/06)
Same deal where I live in LaQuinta, CA. Median household income has gone from 41K in 2001 to roughly 50K in 2005. Home prices (median) gone from 175K to 400K. Wages up 20% home values up 130%. Home values as a factor of yearly wages has gone from roughly 4x to 8x. Very affordable... LOL We have NO significant manufacturing facilities here. Mostly service and hospitality/leisure.
GOOD!! I hope housing prices crash into the ground like tech stocks in 2000. I hope they get so low that they are giving them away. When that happens, I will come through and buy as much as I can. 3-4 houses, whatever it takes. Then flip em to someone else.
Mortgage debt has soared from $4.8 Trillion in 2000 to $9.3 trillion in 2006. Nearly a 100% rise in only 6 short years!!!!!
You also for to factor in taxes, an open house I went to this past week where the school systems arent worth a dime, taxes were $9,000.