Slowing Is Seen in Housing Prices in Hot Markets

[midnight armadillo]

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


October 4, 2005
Slowing Is Seen in Housing Prices in Hot Markets
By DAVID LEONHARDT and MOTOKO RICH

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 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.

[Kolesar]

1. Another recession looming?

Add to that: less travel spending and waning consumer confidence.

[Mayberry Machiavelli]

2. You mean in this great shrubco economy, we ran out of people who could

afford 800K for a 1 bedroom condo in NY or San Diego? :shrug:

Whoudathunkit?

[Zynx]

3. Well, it shouldn't come as a surprise.

In many metropolitan markets across the country there have been very definate bubbles. These cities include, Botson, New York, Washington DC, virtually all of south Florida, parts of Chicago, parts of Milwaukee(the condo market is out of control), many parts of Virginia outside NOVA, Philadelphia, California(almost the entire state), and large sections of Arizona. All of these areas have seen very significant price increases that have pushed prices up to historically very high levels relative to incomes and debt payments. Whatever short term factors that may have been providing "fundamental" reasons for this explosion in prices, they are not permanent and consequently, these prices can not stay and will correct just like any other bubble.

[midnight armadillo]

4. Energy prices will be the killer

I think that the high heating costs of the coming winter will be the end of the housing bubble. Nat gas is up 75+%, same with oil...and those big McMansions cost a lot to keep warm - 12' ceiliings take a lot of BTUs to be toasty!