Welcome to the dead zone (Housing bubble--Fortune Magazine)

[TexasLawyer]

Welcome to the dead zone

Real estate survival guide: The great housing bubble has finally started to deflate, and the fall will be harder in some markets than others.

FORTUNE Magazine
By Shawn Tully, FORTUNE senior writer
May 4, 2006: 2:15 PM EDT

NEW YORK (FORTUNE) - The stories keep piling up. In many once-sizzling markets around the country, accounts of dropping list prices have replaced tales of waiting lists for unbuilt condos and bidding wars over humdrum three-bedroom colonials. The message is clear. Five years of superheated price gains rescued America from stock market collapse, put billions in consumers' pockets, and ignited a building boom that bolstered the nation's economy. (To relive the frenzy, see "Riding the Boom.") But it's over. The great housing bubble has finally started to deflate.

You won't find that news in broad national statistics or the upbeat comments from the real estate industry. The latest official figures, for example, show both new and existing home sales rising in March, a mixed bag on prices - and a record number of new homes on the market.

But FORTUNE's on-the-ground reporting - in what up to now have been some of the nation's hottest areas - paints a very different picture: Contracts are being canceled, deals are drying up, prices are starting to drop. The psychology is shifting even as thousands of new homes and condos join the for-sale listings each day - so the downward pressure will only get worse.

<snip>

But things are suddenly looking very chilly indeed in four coastal cities - Boston, Washington, Miami and San Diego - as well as three Western boomtowns: Phoenix, Las Vegas and Sacramento. So far this year, monthly sales have fallen 11 percent to 25 percent in Miami, Boston, northern Virginia and San Diego, according to local housing experts. The prognosis is even worse in Phoenix, where only 4,500 homes sold in the first three months of 2006, vs. 6,100 for the same period last year, and in Sacramento, where new-home sales plunged 57 percent in the first quarter (compared with the first quarter of 2005). In California it now takes six months to sell a house, twice as long as a year ago. (See a slideshow of home prices in all the troubled areas.)

<snip>

http://money.cnn.com/2006/05/03/news/economy/realestateguide_fortune/?cnn=yes

The article also has sidebars with anecdotal evidence of problems in various cities like:

SAN DIEGO
Since opening in October, The Point 92103, a 48-unit condo, had sold a meager two apartments. The developers cut the list price on a one bedroom from $349,000 to as low as $299,900 and lured outside brokers with rich 5% commissions. So far the moves have led to just one sale.

[TexasLawyer]

1. But hey-- it's all going to be ok

ok, ok, ok, ok, economy booming, ok, ok, ...

[mdmc]

2. thanks for the link tl

peace

[AX10]

3. A ton of equity is locked up in the real estate market.

[Penndems]

4. It's already burst here in Northern Virginia

The townhouse next to ours has been on the market for over five months without a nibble. The owners knocked the price down $20,000, and there still haven't been any takers. The people next door to them put their house up for sale at the beginning of April, and there's only been a trickle of foot traffic going through there.

The Washington Post had an interesting article on the real estate slowdown this past Tuesday:

"Blink and They're Still There: Houses and Condos Are Staying on the Market Longer", http://www.washingtonpost.com/wp-dyn/content/article/2006/05/01/AR2006050101751.html

[laheina]

5. It's burst in Sacramento.

I'm more than a little worried about it.

[SpiralHawk]

6. Me, I blame it on the Bush Republicons

if they weren't so busy enriching themselves at America's expense via their highly efficient culture of corruption, and screwing up every legitimate project they touch, then the housing market (and the rest of the nation's economy) would still be chugging merrily along.

But the neoCON Bush "Republicans" have trashed common sense in their rush to the hog trough. All of America will suffer because of their greed, their short-sightedness, and their lack of morals (despite their vast, expensive, MindFuck propaganda campaigns claiming that "Republicon Family 'Values'" are the only way to keep Beelzebub from waxing your personal skids to ETERNAL agonizing DAMNATION.

Free clue for republicons: The hottest corner of Hell is reserved for hypocrites. Spend some of your stolen booty from the US Treasury on a mirror, and take a good hard look.

[TexasLawyer]

7. And the most dead of the dead zones is...

San Diego, CA

Average home price: $483.0
Fair value estimate: $290.0
Percent difference: 67%
Rating: Overpriced



The other dead zones:
Boston
Las Vegas
Miami
Washington D.C./
Northern Virginia
Phoenix
Sacramento
San Diego