Posted on 02/25/2006 5:33:53 AM PST by ex-Texan
Experts say jump in cancelled orders for new homes is latest sign of how investors inflated the real estate market recently, and how the market is due for a downturn.
* * * Home builders are growing concerned about an increasing number of cancelled new home orders, which experts say could be a sign of an underlying weakness in the recent run in home prices.
Specifically, the cancelled orders could be the latest warning sign that buyers who were turning to real estate as an investment, rather than for their own housing needs, are shifting out of real estate. And that could mean that in many hot markets, the air is about to come out of over-inflated real home prices overall.
A survey recently conducted by the National Association of Home Builders of its members found one in 5 reporting more cancellations than six months ago, with 4 percent of the overall group saying the increase in cancellations has been significant.
"When you start to see cancellations, you really get worried," said David Seiders, chief economist for the trade group.
(Excerpt) Read more at money.cnn.com ...
My last post missed something. There are also 614 pending new construction home sales. Sorry about that.
This story is 18 months old.
Where is this market you are referring to?
Since you are living in the future can I have the winner of the next two World Series and next year's Super Bowl?
I'm near Washington DC. Prices continue to rise here, even in this dead time of the year for real estate sales (albeit not as fast as they did in 2005). Nevertheless, demand seems to be strong for properties whose owners don't get too insanely greedy. Last fall I was worried about the impending bubble burst, but it hasn't burst here yet, and I'm having to fight off people who are begging me to buy my house.
The poorer counties of south/central NC.
Am I reading this correctly when I interpret this to mean that there are about 1000 left unsold? Are these vacation/second home?
Local scam here was builders accepting down payments for new homes then slowing or just stopping work after less than 20% of the homes is built.
The inflation of home values was so rapid that these unfinished homes had already increased in value some 30+%. Builders wanted to buy back these homes while stock piling the materials purchased by the original owner's downpayment.
While dissolution of contract papers were working through the county court, builders finished the homes, waited for the judgements against them, delayed refunding the down payments, and put the homes back on the market with a 30% or even 40% higher market value.
In the mean time the family who put their life savings into a new home/land deal winds up with what currently is an insufficient down paument to try again.
The home owners in the area become so dumbfounded by such high prices that cashing out becomes a frenzy and the market is swamped.
Don't ask me what city or state,,,I won't tell. My own home is on the market. :-)
As a RE investor for 20 years, I have always found the key to the real estate market has always been location, location, location.
I predict price drops this year at the many McMansion developments that have sprung up over the past 3 years. I'm talking about those which are built on that old dairy farm in the middle of nowhere...1 hour (or more)commuting distance to the nearest city center.
Properties in or near "Hot" job markets will hold their values in 2006 and beyond.
Those of you who are waiting to jump on that Georgetown townhouse once it loses 50% of its current value will be waiting in vain.
Same goes for those waiting to buy in other hot areas like
downtown Chicago & San Francisco.
If you recently bought that McMansion off the last exit of the new interstate...you may want to look at this more closely.
the winner of the next two World Series and next year's Super Bowl?
Can't help you. I only have the winning Power Ball numbers for tonight.
I'm a contractor, and the MSM media is been declaring the end of the so-called real estate bubble since October, 2004. Just in time for the general election.
Good read on markets; location is everything; job creation and employment security is key; McMansions are tougher to sell. Wise advice.
NE Patriots in the Super Bowl
and the Red Sox and Cleveland Indians in the Word Series that you asked for.
Leave it to CNN to spin 4% into a doomsday scenario.
Buy more, buy more, buy more!
Nope. I'd rather be a seller right now. But either way I'd not be swayed by CNN's headlines.
I've been reading about the imminent housing collapse since I was about 18 years old. And I'm 43 now.
I remember when I bought my first house for $95,000. People said "are you nuts"? Paying that much for a house! You are out of your mind!
Then I sold that house for $127,000 and bought my second house for $262,000. Same thing. I was making a BIG mistake according to the naysayers. The housing market is going to collapse and then you are going to be oh so very sorry!
Now I live in a house that is assessed at $650,000. I could put it on the market Monday and have a buyer lined up by Saturday. I know this because a neighbor of mine signed a purchase-and-sale three days after he put his house on the market last month. But still, I hear the same old same old sky is falling mantra. If I had listened to all this negativity from the beginning, I'd still be renting some ratty apartment today, making my landlord rich instead of myself.
"Good read on markets; location is everything; job creation and employment security is key; McMansions are tougher to sell. Wise advice."
Thanks.
Just trying to add some rationality to the hysteria.
You sound like an angry renter.
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