Posted on 06/28/2006 5:41:05 AM PDT by Hydroshock
NEW YORK (CNNMoney.com) -- The tell-tale sign of a stagnating real estate market? When homes for sale start lingering - and that's exactly what real estate brokers and other industry watchers say they're seeing now.
The National Association of Realtors does not maintain national time-on-market figures. But inventory - the number of homes for sale - spiked 37 percent for the 12 months through April 30, the most recent data available.
Homes are staying on the shelf longer.
Languishing in hot markets There are no official regional statistics for the time homes spend on the market. Here are estimates for local brokers. Market Time on market Up from Hanover, NH 125 days 65 days Napa, CA 60 days 10 days Phoenix, AZ 60 days 7 days Miami, FL 35 days 20 days
At the same time, the rate of sales has slowed, so that there is now 6 months worth of supply, up from 4.1 months a year earlier.
All that supply means homes are sitting around longer and that sellers are asking more than buyers are willing to pay -- an indication that prices may have to come down.
"Sellers are in denial, and there is a rising disconnect with the buyers," said Jonathan Miller, a real estate appraiser in New York. "Until sellers get the message, you'll see a drop in the number of transactions."
Philadelphia has seen only a modest run-up in time-on-market from about 23 days last year to a still low 33 today. But the city's inventory has grown from nearly 21,000 last year to more than 36,000 today, a more than 50-percent jump.
"The sales pace is identical, but inventory is way up," says Harry Caparo, who runs Coldwell Banker Preferred in Philadelphia. "Time-on-market is going to start to rise."
(Excerpt) Read more at money.cnn.com ...
But realtors were screaming to buy now or be priced out forever! That they weren't making anymore land! Median home prices always double every year! How can this be?
Part of this "stagnation" is the higher interest rates. Drop them a bit more and watch the market rocket back.
The house next to mine has been empty for more than 5 years now. It's been sold at least twice and belongs to the bank at this point. Overpriced is simply overpriced and unsalable.
read the whole article...it's not as doom & gloom\sky is falling as you make it appear.
stagnant and slowing are 2 different things.
The interest rates that govern mortgages (primarily the 10 year note) are market driven, not driven by the Fed. There is no one to "drop the rates" other than increased demand for fixed-income securities.
In the Tampa market the median home price has increased 18% over the last year and interest rates have bumped along considerably.
We have higher inventories, but our market has grown by 60,000 residents in the last year.
At the end of the day... the 2005 buyer has a payment about 20-30% lower than the 2006 buyer on a typical home in our market.
Sellers (and their brokers) can't simply put a home on the market and watch it disappear anymore. It is much more of a balanced market today.
drop them a bit and watch the dollar tank, too.
There is always different dynamics for different markets.
Florida and California can't be compared to places like Seattle and Denver. But there is simply no way that many of these markets can continue double digit price % increases year after year if average salaries do not.
I don't care how easy banks make to loan money.
I think the odds of some massive real estate collapse are thin, but I do predict increased stagnation as inventory numbers continue to increase, including some price drops, even in the markets that have been the hottest the past couple years.
I just visited the family on Oahu recently. Although real estate in Hawaii is always been expensive, the price of homes have basically doubled to tripled in less than a decade, with most of the gains in just the last couple years. I don't care how low interest rates are. Eventually something has to give.
Your already seeing this occur in cities like Pheonix and Washington, DC.
Markets like Miami where there has been massive condo buildups and 10's of thousands of new units scheduled to be completed this year and next will get hit hard. The majority of these project are ofcourse higher end projects.
Just like I see around Seattle. Every large condo project going up around here are all these buildings where you can't get a studio for less than 500K, and condo fees are easily 500 a month or more.
My condo's in Florida dropped about 10%, we are still keeping them. Its a seasonal thing here, and the housing market is expected to rise again in a couple of months. With a golf course and Gulf access, its best to hold on to the property. Any home on the water or with a golf course in the rear tend to drop very slightly in a slow market.
ping
http://media.living.net/releases/May%2006%20Sin%20Fam%20Ex%20Chart.html
Increasing supply...decreasing demand.....guess where prices are going to go....
Exactly.
"Maybe house prices can come down some, so young couples that are just starting out in life can afford to buy a place for themselves."
It is remarkable to note that generations of home buyers who have struggled to first find the down payments, then pay on their mortgages for decades in dollars that were not easy to earn, are scorned by the "me first" crowd. Today anyone can get a loan and get into a house if they want to pay the price.
SELF FULFILLING PROPHECY ALERT !!!!!!
The media has been screeching about a housing bubble for almost a year now. Anybody who was on the fence about selling in the last few months is probably thinking "it's now or never" and many folks are putting their homes on the market hoping to cash in "before the bubble bursts". It isn't a shock that many more homes are on the market and it isn't a shock that buyers are being more careful because of higher interest rates and because right now, there is so much real estate to choose from.
I know several agents that right now, have 2-3 times the number of listings that they normally have. Not because the houses can't sell but because everyone who can, wants to sell.
It's all about the price. If it doesn't sell or sits too long, it's the price. "There's no problem in real estate the right price won't fix."
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