NYT: Slowing Is Seen in Housing Prices in Hot Markets

[RamboLiberal]

http://www.nytimes.com/2005/10/04/realestate/04reals.html?hp&ex=1128484800&en=e9bc032df8f4ec49&ei=5094&partner=homepage

A real estate slowdown that began in a handful of cities this summer has spread to almost every hot housing market in the country, including New York.

More sellers are putting their homes on the market, houses are selling less quickly and prices are no longer increasing as rapidly as they were in the spring, according to local data and interviews with brokers.

In Manhattan, the average sales price fell almost 13 percent in the third quarter from the second quarter, according to a widely followed report to be released today by Miller Samuel, an appraisal firm, and Prudential Douglas Elliman, a real estate firm. The amount of time it took to sell a home was also up 30.4 percent over the same period.

In Fairfax County, Va., outside Washington, the number of homes on the market in August rose nearly 50 percent from August 2004.

[Gregorian]

1. Something tells me we'll see a real slowdown after Oct 17th.

When those who needed to sell, couldn't do it in time. And they end up dropping the price in an emergency. Just a guess. I love to guess.

[SleeplessinSoCal]

3. Is that when the Bankruptcy Bill goes into effect?

[TexasLawyer]

2. this is how the bottom falls out

it's the rush to the exits...


Brokers said that some houses seemed to be on the market longer because sellers priced them too high, assuming that their value was still rising sharply. In other cases, people who otherwise would have waited a year or two to sell their homes - like empty nesters ready to move into smaller quarters - had listed them now out of fear that prices would soon fall.

[the_spectator]

4. Hey hey! So if we don't get a "massive die off" of human population,

at least we could maybe get a burst in the housing bubble! Hope springs eternal!

[KayLaw]

5. On another board

People are trying to help a woman who is in debt and actually trying to take on more debt to buy land. Years ago they bought a house with no money down and rolled the closing costs into the mortgage. Then they did cash-out refinancing to pay off $18,000 in credit card debt at which time the house was assessed at $195,000. Since then, they took out a signature loan (HEL?) and racked up another $22,000 in credit card debt.

They decided to sell their home last year for $179,000 but despite many showings have received zero offers. She lives in rural Ohio and many factories have shut down and that's part of the problem. Another poster did a quick search for homes and found a comparable house listed for $144,000. The woman in debt said they may drop the price on their house to $175,000 but they'll lose money as their mortgage is for --I can't remember --$165,000 or so.

No one said so but I think they'll lose their house. She was warned about the increasing interest rates and the doubling of credit card payments but it went right over her head and she went to an auction and bid on some land she wants. Fortunately, she was outbid, but when someone asked her how on Earth she planned to pay for this land, she said the bank had approved her for a 50k+ loan. . . she just couldn't figure out how she was going to make the payments on the loan.

How many cases like this are there in this country, I wonder? This woman thinks she's rich, and I came to believe after reading her posts, entitled to spend and consume with no limits. She ate her house and then some, and is still hungry!

What will happen to her and people like her? Why would the bank loan her $50,000? Would you? It's insane and I think it's a common story in our country and that, somehow, we're all going to pay for this.

[ozymandius]

6. Houses tend to sell better during summer season.

With summer coming to a close, it does not surprise me to see houses sitting unsold for longer amounts of time. Though I do not discount a liquidity crunch.

[nolabels]

7. The simple rule of supply and demand takes place after awhile

I have been living in the same place and waiting for 20 years for this rush in the housing market. Thanks to this 400% increase in estimated value in this area me and the wife are able to do the improvement on the property like we always wanted. We ain't sellen and even with a correction of 30 to 40% later on in the value we will still be okay. Even if the balloon pops worse (which I doubt) we will probably still be okay with the improvements because we were going to do them eventually anyway. We both have pretty much recession proof jobs and the last kid is sophomore in high school.

Too many houses and not enough buyers could be the case but ridding the wave while you can could also make sense. Thinking that everything goes up and never goes down is where people make the mistake if you ask me

The other angle of the story might be that property values got a real correction with the increase of their value because of underestimated real inflation. I am sure it went overboard with it all by now though

[BiggJawn]

8. So soon I won't look like such a "dummy"?

Because I rent?

At least I won't be holding $250,000 worth of paper secured by property worth $50,000 and dropping...

[mahatmakanejeeves]

9. from the article

"In another sign that the housing market might have reached a peak, executives at big home builders have sold almost $1 billion worth of company stock this year."

[catmandu57]

10. Houses slowed down here a couple of years ago

During the nineties houses here had a very short shelflife, we had a building and buying boom. There are houses being built yet, but, it's slowed to a crawl, and most preowned houses sit for a very long time.

Part of the problem here is, at one time this was a small farming community, the people living here depended upon the local industry to survive.

Then we experienced a wave of suburban buying, we are just close enough to employment in larger urban areas to be attractive. Small town living without the noise, crime, and other problems, we leave our doors unlocked and the key is in my cars ignition all the time.
Now, the cost of fuel to work out of the area is hitting people in the pocket book and it costs more just to get to work.

As a result people aren't moving here as fast as they once were, houses are sitting empty, it's hard to even rent out empty houses now, I see for rent signs all over town, the duplex next door has been empty since June.
We are returning to a small town.

[midnight armadillo]

11. Energy costs will do the market in

The heating costs of the coming winter, combined with higher commuting costs for gas, will do in the market this winter. Oh, that and rising interest rates... I think a lot of people who are up to their eyeballs in real estate debt will be in big trouble soon. Especially those with big McMansions.