New-home sales take a tumble
Dustin on 03 25, 2006
The Seattle Times reports that new home sales are dropping nationally:
New-home sales fell by the biggest amount in almost nine years last month while home prices declined for a fourth straight month, raising concerns that the once high-flying housing market could be in for a rougher-than-expected landing.
The Commerce Department reported Friday that sales of new single-family homes dropped by 10.5 percent last month to a seasonally adjusted annual sales pace of 1.08 million homes.
It was the second straight monthly decline after a 5.3 percent fall in January, and marked the biggest one-month drop since April 1997.
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The Seattle Times, like most of the mainstream media, has misinformed its public.
Sales in the Western United States plunged over 29%. They were up in double digits in the Eastern United States, and up over 5% in the midwest.
The devil (or was it god?), as they say, is in the details.
Joe,
You make a good point and I’d definitely aware of the regional differences… But I don’t think the “misinformed” the pubic in that the facts are right. Nationally, things are doing so well, even if things are still relatively hot in the midwest (and Seattle!).
Most of my Realtor friends around the Country are reporting that they are in a buyers market.
Far as I can tell here, we are not anywhere near a slowdown (Eastside anyway). Sales are down because inventory is down,but anything decent coming on market is selling, many with multiple bids. Plenty of buyers…not enough good houses to sell them. I have two listings coming on next week. Let’s see how fast they sell.
Most of my buyers have found something….all except one. Things picked up this week.
Ardell,
Heard anything about Pierce County market conditions? Has a buyers market emerged there yet?
Eric,
I haven’t heard much about Pierce County in particular, but you might find it interesting that the NorthWest MLS publishes data through their NWReporter every month. The latest data is from February, and this page lists a few interesting tables and adds some (agent) perspective.
Yale economist Robert Shiller seems to think we may have a real estate collapse on our hands. The National Association of Realtors thinks otherwise.
For those that are unaware, Robert Shiller is the author of “Irrational Exuberance.” His thinking was quite unpopular leading up to the stock market correction (collapse for you Bears) of 2000.
You can view Robert Shiller’s partial commentary at http://www.washington-realestate.blogspot.com or the full ABC News Nightline interview at: http://www.abcnews.go.com/Nightline/story?id=1764935&page=1
I’m still trying to understand real estate. Most people want to buy beautiful luxurious homes. But there are ads that I see which says they want to buy a ugly house.
Little’s Blog Things
Good question, Lito. There is a franchise called “We Buy Ugly Houses” and other outfits with similar names. Most try to buy your house for 80 cents on the dollar and then remodel and flip them. Some try to buy your house for 80 cents on the dollar and then sell them for more money without remodeling them. The latter are basically capturing the money the seller leaves on the table. Some sellers just want money fast.
Many, or at least some, do not have licenses. Licensees, generally speaking, have to get the most money they can for the seller, and cannot profit from the seller’s naivety…for the most part. That is why there is a quote from me by Inman or RealtyTimes or some Googleable search of my name, saying “ask to see their real estate license”.
If you are dealing with a “buy ugly houses” outfit that is not licensed, be a little more careful to represent yourself than with one who is licensed. Be careful ALWAYS that you are not giving up more than you should for the convenience of fast cash.
Lito,
A couple of posts back I talked about how difficult it is to remodel and make any money by flipping. The franchise “we buy ugly houses” has found a way to do that by buying below market. There’s a whole business model with business overhead, just to find those houses that can be bought for a 20% discount i.e., every looked into the cost of bus advertising which is where I most often see this advertised?. I wish every buyer I’ve ever heard that wanted to offer 20% below asking would see what it takes to get just that.
Eric D. You asked about Pierce County market conditions. Seems to me that there has to be some local pressures around Fife as fallout from D R Horton’s Radiance Community http://www.liveatradiance.com
I don’t like to comment on stats and market conditions on such a broad area like, national, King County or Pierce County. In my experience Downtown Kirkland can go up 25% while 20 minutes away the appreciation can be 8%. A new home community as large as Radiance with 25 or more models in all price ranges, can put a lot of pressure on the nearby resales. Yet in other parts of Pierce, they won’t feel it at all.
So if you give me a smaller geogrphic area in Pierce, I’d be happy to comment further.