Posted on 06/27/2005 5:52:49 AM PDT by goron
Housing bubble trouble - Mass. home sales plunge 11.1 percent By Jay Fitzgerald and Jerry Kronenberg Friday, June 24, 2005 - Updated: 07:28 AM EST
The bubble hasn't burst, but the air may be leaking out.
Massachusetts may be finally entering a buyer's market for homes, experts said yesterday after new data showed the volume of single-family house sales plunged in May by the largest amount in nearly three years.
About 4,142 single-family homes sold last month, down 11.1 percent compared to the same period last year. It was the second straight month in which the number of year-over-year home sales declined in the Bay State, the Massachusetts Association of Realtors reported.
The decline was the sharpest since August 2002, when sales drooped 14.1 percent in year-to-year comparisons.
Prices of both homes and condominiums continued to rise last month - by 6.2 percent for single-family dwellings and 4.7 percent for condos. The average price for a home was $359,900 in Massachusetts, while condos were going for a red-hot average of $279,900, an all-time record.
But the year-to-year percentage increases in prices were still only in single-digit figures, something that's become rare in Massachusetts in recent years.
Maggie Tomkiewicz, president of the Massachusetts Association of Realtors and owner of M. Macdonald Realty, said the figures show prices moderating - though she said it's too soon to tell if that moderation will continue.
Karl Case, a Wellesley College economist, said ``people are really getting spooked'' by media talk of a housing bubble. ``People are getting cautious with their bids. So it's partially a self-fulfilling prophecy.''
He said continued low interest rates, a low housing supply and strong demand are keeping the market going. But sooner or later those dynamics are going to change, he said.
``I think it's in part the real McCoy,'' he added of a possible fundamental market shift already underway. ``We're not growing the economy very strongly. But if you mean, `Am I anticipating a big price decline?,' I still don't expect that to happen. I don't think (a) crash . . . is likely.''
While no one can give an accurate answer to the big question - If there is a housing bubble, when will it burst? - MAR did release new data indicating that the state is finally entering a buyer's market.
There were about 36,259 homes on the market last month, or a supply of 8.8 months, a figure generally thought to be favorable to buyers, experts said.
The Massachusetts housing market seems to be running a slightly different path than the rest of the nation.
Sales of previously owned homes fell by 0.7 percent in May across the country, but rising demand pushed prices to an all-time high. The median home sales price increased to $207,000, from $205,000.
Really, this is about time. They're selling planter shacks out in NOVA for about $250K.
Actually, the bubble keeps going...
..... The Massachusetts housing market seems to be running a slightly different path than the rest of the nation.....
Duh....Do ya think? The reason is that any sane person in his right mind wouldn't move to a state that punishes free enterprise, promotes union-like mentality, and fosters the growth (by whatever means necessary!) of the Democratic voter base. What happens there has nothing to do with the rest of the country with respect to the existence or not of a "housing bubble." This is just push-polling put to action trying to make the bubble burst.
The weather, the gays, Kerry, Kennedy, I could go on and on...
Karl Case, a Wellesley College economist, said ``people are really getting spooked'' by media talk of a housing bubble.
Read the May figures.
So people are abandoning Homoville USA and NOT buying back in, BFD!
Of coure you realize how potentially bad this will be if it spreads to the other major regions where the housing market is red hot.
For owner/occupiers who took out adjustable rate mortgages, it could be catatrsophic if interest rates rise. For invetors who thought they would get in on some wonderful capital gains, they won't even be able to cover their interest payments with the rent.
Then we have a downward cycle vis-a-vis Germany and Japan where consumer spending is flat or declining for year after year.
I doubt Greenspan has another card up his sleeve. Prices need to stop rising, but I sure don't want to see them fall. I hope you have your home paid for.
The really high-end homes (4 million dollars or more) in Northern California that have been sitting on the market for a while are starting to see big price reductions. Cheap and easy mortgage money is keeping the bubble going in the lower-middle section of the market, but the end is near.
Not to mention the risk of driving in Mass. while Teddy's on the road!
"The winters are harsh, the summers are brutal. THERES A MAN EATING CLAM IN THE BACK YARD!!!" - SB
Correction: Why media liberals and some freepers sooooo freakin' obsessed with trying to destroy the housing market?
Fisting must not be as popular nowadays.
Teddy doesn't drive in MA anymore - because he doesn't live in MA anymore. It is the people of VA that need to worry about "the swimmer" on their roads.
Massachusetts will always be worse than the rest of the country, due to their weather and especially their politics. Who wants to move to a state represented by Ted Kennedy and John Kerry?
I do not know about freepers...
But ANY gloom on the U.S.A. while a republican is in the
White House will be coming at you 24x7-
highest pecentage of owned homes EVER- not a word
lowest unemployment in decades- old news
The MA market is taking a little breather. Those who think this is the peak, the turning point, will probably be mistaken.
At one point 6 black tulips would have bought you a 6-story row house in Amsterdam. Everyone new it was absurd and a lot of people got out then and there. A few weeks later 1 tulip would buy that house. Of course, the tulip bubble burst too.
The sign of a stock-market bubble is when p/e ratios are out of whack. A housing market equivalent is the rent to the price of a house. It is slightly more complicated to calculate, but no matter how you do it, you see it is way out of whack. The economist describes it best here: http://www.economist.com/displaystory.cfm?story_id=4079027
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.