Don't shoot the messenger
I got my knuckles wrapped a bit over yesterday’s blog when I called the recent spate of real estate news depressing.
It’s what makes blogging fun.
However, while the comments were insightful, some missed the point. If falling prices are bringing out the bargain hunters, all the better to get the market on track. But the current round of real estate numbers may say more about a nascent recovery that may have been taking shape over the summer than what has actually transpired after the global financial markets went into meltdown mode in September.
In reporting sales that closed in October, both the Warren Group and the Massachusetts Association of Realtors are giving a great snapshot of real estate activity back in the waning days of summer when these sales were initiated. Nothing against either group, it’s just the way the numbers are reported. And again, we’re talking pre meltdown.
But we don’t have to wait until the next month’s real estate numbers to see the impact the financial turmoil is having on home sales.
A major clue on that front was dropped yesterday when the Commerce Department reported that new home sales fell to their lowest level since 1991.
While just 10 percent of the market, such sales are considered timelier since they are based on recently signed contracts, Bloomberg News notes. It’s a window, even if a little narrow, into what is happening now in the real estate market, not what happened last summer.
Anyway, have a happy Turkey Day.
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LOL. I had to laugh when I read this blog entry. That's because I had written a post to Rona's blog (she was reminiscing) asking if she remembered when some people used to say “Happy Turkey Day” instead of Thanksgiving, until advertisers and PC pressure pushed it out of favor. I discarded the post because I figured that I would get tarred for just for bringing it up, and for being insensitive to turkeys, vegans, and people who dislike saturation marketing slogans. :>)
I also realized that some might even think that I was sneakily calling them (or Rona) a turkey.
Posting is such a minefield...
Some anecdotal information about October sales in my corner of Metrowest.....our office posted just ONE sale in October, and no new listings - we're usually double-digits in both categories. Other offices in the area had zero sales and zero listings. (I'm not including closings, which are late summer sales).
November is looking much better, although the number of short-sales and foreclosures is stil high.
or you could look at uag's on mls. it's obviously overstated by the deals that will hit a fatal snag w/ finance, inspection, appraisal, etc and may even have a few late summer deals that are slow to close but it's a tool. not many meetings of the mind in our target market. still no substantial price reductions on the part of sellers, especially as reo's are virtually nonexistent. it still appears to me the negative pressure on price has come disproportionately from distressed properties. silver linings for the crowd hoping for softer depreciation would be the increase in sales volume pre-meltdown and the reduction of notices filed in october. both occured prior to the drastic plunge in consumer confidence and spending. it's difficult for me to believe individuals will forgo day to day conveniences and luxuries but still jump into huge amounts of debt to purchase a depreciating asset unless they are getting a substantial discount from current market value.
We were seeing a classic dead cat bounce, but the crash finally arriving killed that cat even deader.
Now we are seeing the discretionary sellers (broadly defined) pulling out and waiting, because hey, the spring market will be much better!
It'll be after the spring market is NOT better that people will finally capitulate. Might be 2009, might be 2010.
In any case, we will not see bottom until we have capitulation. True capitulation, not just the media talking about it. And the prices and ratios of upmarket boston real estate do NOT reflect true capitulation yet. Financial analysts universally agree on that (though they differ on how far down things will go)
Only the real estate industry thinks now is a good time to buy... No surprise, can't recall when they didn't think so.
By the way Scott, as I've said before, I think you are doing a very good job. The metric is comments - your posts are getting people interested enough to comment. Whether they (or I) agree with you or not is actually much less meaningful.
This blogger might want to review your comment before posting it.
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