U.S. Housing Market slowdown articles

[Charlotteman]

Bremerton, Washington (an exurb of Seattle) is where I live. Since 2004, the real estate market has exploded here. In the two or so years of this boom, property values have increased about 20% a year.

However the feverishness, the wildness of seeing an overpriced home selling in a week seems to be rolling to a halt. The prices are staying steady, but times on the market are going up.

If interest rates keep going up, I fear the real estate boom will be dead very soon.

[AlabamaGuy2007]

The Greater Birmingham area's home sale have continued to grow at a fast pace. Despite the national decline. Home sales rose 20.3% over the past month.

Here's a link to today's article about home sales in the Birmingham News.

Greater Birmingham Home Sales Buck U.S. Trend

[GRDadof3]

Builder's confidence slumping (to a 15 year low)

Builders in all four regions of the country are pessimistic about the market. Sentiment fell by six points in the Northeast to 28. It fell by five points in the West to 38 and by three points to 38 in the South. The sentiment index held steady at 16 in the Midwest.

"The housing sector is likely to shed 1.5 million to 2 million jobs . . . over the next several years," said Andrew Tilton, an economist for Goldman Sachs.

It's the fastest 8 month decline in the 21 years of this index. Ouch! I think areas like Arizona and Florida are about to see the end of the sub 3% unemployment rates. I'm getting no joy out of this BTW. The real problems occur when people who foolishly bought into 5 year ARM's or interest-only loans at extremely low down payments not long ago go to refinance and find their new (lower) appraisal puts them upside down on their mortgage.

[fivedayrental]

I'm just getting started in the business. I feel if you price a home appropraitaly at the beginning, you should have no problem bringing people in. My neighbor has her house for sale listed with another company, since I'm still waiting for the paperwork to come from the state, for about $40-50,000 (in a roughly $390-410k neighborhood) over what I would have listed it at since it is smaller, has only 1 1/2 baths (most have 2) and the kitchen is dying for an update since it its the orginal 1965 cabinetry . There has been about 6 or 7 visits in the month that it has been for sale.

[GRDadof3]

I'm just getting started in the business. I feel if you price a home appropraitaly at the beginning, you should have no problem bringing people in. My neighbor has her house for sale listed with another company, since I'm still waiting for the paperwork to come from the state, for about $40-50,000 (in a roughly $390-410k neighborhood) over what I would have listed it at since it is smaller, has only 1 1/2 baths (most have 2) and the kitchen is dying for an update since it its the orginal 1965 cabinetry . There has been about 6 or 7 visits in the month that it has been for sale.

Good luck!

Housing slump in U.S. may lead to first drop since the Depression

The U.S. Coast Guard lieutenant was transferred to Norfolk, Virginia, in July and put his house on the market in August at a price lower than he wanted: $379,900. The house across the street, similar to his own, sold last year for $425,000

Burning Equity

``If you have to go, you have to take what you can get,'' says Francisco, 29. So far, he has no offers.

A 29 year old Coast Guard Lt in a $379,000 house?

Some sellers across the U.S. must reduce their expectations, even those who don't move. Edward Brown, 47, a Florida real estate investor, says he's financially overextended and needs to sell a three-bedroom house in Cape Coral, Florida. He's asking $579,000 -- $20,000 less than he paid for the property a year ago.

``No one expected the market to drop so quickly,'' he says. ``There are a lot of people like me who are caught in a pickle.''

[goodbye]

http://www.usatoday.com/money/economy/hous...charlotte_x.htm

Sales in Charlotte are up 14% from last year, NC is up 10%, while the nation is down 6.6%. This probably mainly because of undervalued housing and strong population growth.

The I-85 power corridor has been quite strong for awhile now. A recent report for Greenville said that home sales are up 17% over last year. I was very surprised by the number, especially considering the news in the national media lately.

[VistaLakes01]

The I-85 power corridor has been quite strong for awhile now. A recent report for Greenville said that home sales are up 17% over last year. I was very surprised by the number, especially considering the news in the national media lately.

What is happening is the trickle down effect. When prices (equity) in the NE and the West (California) was high people were selling and moving to markets such as Florida and Arizona. That drove the prices up in those areas and I (being from Orlando) know that a large majority of people from here were taking their equity and moving to the Carolinas, Tennessee, Alabama. That is what has caused the increase there, they are in late in the game. They will settle down in a few months as now the market is coming to a halt in Florida, so we won't be buying in the I-85 corridor as much anymore.

[GRDadof3]

It's interesting too that the housing market is softening quite a bit in markets like Tampa, where they are just a tad over the national average for home prices and they are adding quite a few jobs and population per year. It defies all logic, unless there are other forces at work (such as too much credit, $0 savings rates for the U.S., predatory financing, too many people in ARMs or Interest only loans, etc. etc.).

[GRDadof3]

The U.S. housing slowdown appears to be deepening and widening:

UBS turns sour on prospects for Home Depot, Lowe's

"The housing market in the United States continues to slow more than initially expected," Nagel said in a research report. He noted that shifts in housing data typically precede changes in same-store sales at Home Depot and Lowe's by six to nine months...

..Considering that rate, he's expecting the impact of slower housing numbers seen lately "could become much more pronounced"

Bleak houses - Toll Bros & Beazer Homes announce record cancellations

Orders nosedived for Toll by 55% in the past quarter, and over 60% for Atlanta-based Beazer.

Pulte Homes profit plunges 55% in 3Q

I read that it's estimated 1/4 of the jobs created in the U.S. in the last 5 years were housing related (construction trades, real estate, mortgages, appraisers).

I also think the run-up in the stock market is directly related to people pulling money from real estate and redirecting their investment portfolios to the equity markets again.

Anyone else watching this, or want to trade theories?

[peaceloveunderstanding]

Charlotte's sales are were up 3% in October from last year. Business as usual so far.

[tamias6]

I think affordability or lack there of is what scares people. Honestly, if a loan officer said that you where going pay somwhere north of thousand dollars a month for the next 15 to thirty years of your life how would you feel? That is still alot of money reguardless of income. I think people are begining to get sick of being a slave to a morgage payment. After seeing what my bother and his wife have to go through to afford there home, I think that if I bought a home, it going to have to be on my terms, i.e. very large down payment to cut the monthly payments to somthing easily digestable where I don't have to work multiple full time jobs just to feed the morgage.

[GRDadof3]

Charlotte's sales are were up 3% in October from last year. Business as usual so far.

[teshadoh]

I can only assume the housing market has worsened in Atlanta - I'm putting my house off the market & renting it out now. Besides my home's own particular issues, our realtor has said the market isn't as good as it was from last year. But, as much as I would love to sell our house now - it is good that the market is correcting itself.

[monsoon]

Charlotte's sales are were up 3% in October from last year. Business as usual so far.

[suburban george3]

This misses the part that downtown condo sales were down 58%.

[MZT]

Are condo sales doing well anywhere in downtown areas??? This seemed such a fad, and yet here they are still announcing new projects... I don't get it.

[peaceloveunderstanding]

This misses the part that downtown condo sales were down 58%.

[GRDadof3]

I hear it a lot on this board that downtown condo markets are "immune" and "different" from the rest of the market slowdown. I don't think so. Considering that downtown high-rise living is a fairly new concept in most mid-sized cities in the U.S., most of these potential buyers are moving from the burbs. If the buyers can't sell their suburban home, there's a good chance they are not going to move into their new high-rise condo. And also considering that high-rises are priced at least 50% - 100%+ higher per square foot and with 100%+ higher association fees than their suburban counterparts, which market do you think is more volatile and more susceptible to a correction? They are a "luxury commodity".

If a suburban condo developer has a sales slowdown, he can just stop building specs, sell off his inventory and let the rest of his plat just sit there until things pick up again. What happens when a high-rise is 75% built and sales go in the toilet?

Not to pick on Charlotte moonshield, but isn't it heavily tied to the banking industry? Much of the growth of the financial industry in the past five years is heavily tied to the exploding national housing market. As things cool off, I can't see how the banking industry would not be affected.

If you are familiar with Fannie Mae and Freddie Mac, they were set up by the federal government many years ago to provide affordable home loans to the American people. Actually by Franklin Roosevelt to get the Great Depression economy going again (how ironic) They are now privately owned and carry twice as much debt as the entire U.S. banking, insurance and financial services industries combined ($4 Trillion to be exact, 70% of U.S. mortgages). THIS article estimates that Fannie Mae could lose $29 Billion in the ongoing housing slowdown. This WILL have implications on the banking/mortgage industry.

I just don't think that this slowdown will be relegated to certain markets, as many of the so-called "national housing experts" are claiming.

I'm not usually one for "more regulation", but I think in this case, the mortgage lending industry needs to be reigned in before things get really bad (if not too late).

BTW: That mortgage "bellweather" Fannie Mae that the mortgage industry relies so heavily on was recently involved in an accounting scandal worth $10 Billion (way more than Enron), and had to pay a $400 Million fine. It's estimated that the review and fining process will cost them $1 Billion:

http://www.philly.com/mld/inquirer/business/15965234.htm

I know this is not a popular topic, but I'll even post good news (if I see any).

[GRDadof3]

Countrywide Home Loans CEO says housing slump has a year to go

I think he's being optimistic

Home Depot warns over housing slowdown

Wal-Mart and Target are also planning extremely aggressive pricing strategies this holiday season due to its belief that the housing market may temper shopper's moods.

http://www.smartmoney.com/onedaywonder/ind...?story=20061102

But in good news, Sen. Dodd, the new Senate Banking Committee Chairman, vows to pursue heavier restrictions of Government Sponsored Entities like Fannie Mae and Freddie Mac

http://www.marketwatch.com/news/story/stor...CADA48F893C2%7D

They may not like what they find in their initial review.

[MZT]

You missed the KB Home CEO resigning, amid an options backdating scandal. (I guess he thought Sarbanes-Oxley has a clause excluding home builders...)

Plus, KB's bond holders are also getting nervous. KB's payments are getting slow.

[GRDadof3]

You missed the KB Home CEO resigning, amid an options backdating scandal. (I guess he thought Sarbanes-Oxley has a clause excluding home builders...)

Plus, KB's bond holders are also getting nervous. KB's payments are getting slow.

[GRDadof3]

Even Qatar is watching this story unfold. They raise a good point: if Americans start to reverse the trend of absolutely $0 going into savings, then it could push the U.S. into a recession.

In other news, a leading democrat defended GSE's Fannie Mae and Freddie Mac. Disappointing. The "implied" support these companies get from the Federal government is exactly what has put them in such a dangerous position.

But in the Shreveport Times, apparently they think the U.S. housing decline is just STARTING. October was the worst level of housing starts in 6 years. So not only have housing starts come down off their all-time highs, they've begun to revert back to 2000 levels.