A mixed bag on housing

So what's going to happen next year when there's no first time home buyers credit? Where are the buyers going to come from? Are housing sales going to be down 50% from March 2009 to 2010? Stating that "we are finally hitting bottom" is naive considering the outlook for NO housing credit AND higher interest rates next year. Is an increase in employment going to offset these factors?

What does it mean when I look at home's sale history and the last sale, usually within the past 2-3 years, was for $1? Does that indicate foreclosure? Does that indicate the owner passed away and the estate was transferred to the next of kin? While I only came across this occasionally months and years back, I'd say 3 or 4 out of every 10 homes I look at now have this.

It’s enough, anyway, to support the new storyline that is emerging on housing and other parts of the economy, that we are finally hitting bottom.

LOL. Nothing is needed to support that storyline. Reporters and realtors just make it up. Facts--like the fact that half of all this sales activity is foreclosures--are not needed.

When we do see a bottom, it will come first in volume, and only after a long period of time, probably years, will we see the bottom in prices. Two different things.

Scott, please stop insulting your readers with these completely manipulated & phony numbers that the NAR hacks fabricate out of thin air every month. I know you don't like to follow the doom & gloom, sky is falling "herd mentality". But playing the contrarian for contrarian's sake is a little disingenuous & patronizing. You're better then that. I think.

Can you say eye of the hurricane? I'd hold off on even starting to chill the champagne. Much more downside to come.

Where's my comment?!?!

Where's my comment?!?!

More positive news: The Census Bureau reports new home sales dropped to the lowest level since it started keeping track in 1963. A 30% drop year over year, and even a small drop from February.

Wow, every day just brings more and more support for the storyline that housing is turning around. Buy now, or be priced out forever!

"Home sales fell 10 percent during the first quarter compared the first three months of 2008. That does not sound so good, until, of course you compared it with the nearly 18 percent nosedive we saw in the fourth quarter of 2008."

Things are going to hell less quickly, hooray! We are all saved!

None of the numbers have shown stabilization of either volume or price, and when the inflection point will be reached is debated. However, looking around my neighborhood (non-foreclosure properties), I am surprised to see a number of "sold" type signs plastered on the "for sale" signs of homes that would fall into middle to upper third market price ranges. A neighbor is selling his home to move up to a more expensive home in our neighborhood. I realize this is an "N of 1", but is anyone else seeing this in their neighborhoods or is this just a little Spring bump in my area (W Mass)?

Anyone want to be they extend the tax credit deadline????

While I appreciate the attempts made by various industry groups to put positive spin on the data, let's face it: The news is not “mixed”, it's bad. 50% of sales are foreclosures, which means the sales volume for non-distressed sales is very low-- roughly one third of “normal” levels seen in the past 10 years by my math.

But there is some good news. What many people don't realize is that the glass is still “half full” for sellers. Prices are 30% too high in the Boston area which is why smart sellers (including banks) are cutting their prices NOW to get out before the panic hits. Personally, I agree with this approach. I'd rather sell at 15% above fair value this spring (assuming a 15% price cut needed to sell quickly) than at or below fair value in a year or longer-- even if it means taking a loss. But I guess that's just me. This is America and others are free to make their own choices.

It pains me to say this, but I just don't see the market getting better for sellers anytime soon. In fact, I think it's going to get much worse fast. It will take a decade or two for home prices to return to levels seen in the recent peak. Hold-outs are in for a very rough ride ahead. Cut your losses and move on.

Bostonrunner - This is happening fairly frequently.
I have seen numerous homes in E MA that were purchased 10 or 11 years ago selling for nearly twice the 1998 -1999 sales prices.
I have also seen numerous condos in metro Boston selling at or near 2004 - 2005 levels
Most of the sellers were moving up and taking advantage of good opportunities.
It is not all gloom and doom.
It seems that the subprime foreclosure numbers are effecting the stats but not
hye real tansactions.

Bostonrunner - This is happening fairly frequently.
I have seen numerous homes in E MA that were purchased 10 or 11 years ago selling for nearly twice the 1998 -1999 sales prices.
I have also seen numerous condos in metro Boston selling at or near 2004 - 2005 levels
Most of the sellers were moving up and taking advantage of good opportunities.
It is not all gloom and doom.
It seems that the subprime foreclosure numbers are effecting the stats but not
hye real tansactions.

Bostonrunner - This is happening fairly frequently.
I have seen numerous homes in E MA that were purchased 10 or 11 years ago selling for nearly twice the 1998 -1999 sales prices.
I have also seen numerous condos in metro Boston selling at or near 2004 - 2005 levels
Most of the sellers were moving up and taking advantage of good opportunities.
It is not all gloom and doom.
It seems that the subprime foreclosure numbers are effecting the stats but not
hye real tansactions.

Bostonrunner - This is happening fairly frequently.
I have seen numerous homes in E MA that were purchased 10 or 11 years ago selling for nearly twice the 1998 -1999 sales prices.
I have also seen numerous condos in metro Boston selling at or near 2004 - 2005 levels
Most of the sellers were moving up and taking advantage of good opportunities.
It is not all gloom and doom.
It seems that the subprime foreclosure numbers are effecting the stats but not
hye real tansactions.

why is bottom good news, if its an awful bottom? Its not like we're going to bounce off the bottom this go around.

So if home prices went to zero, would that be amazingly great news since they couldn't get any lower?

Back in the old days, we used to think good news was actually good - not variations on bad.

And finally, a YEAR OVER YEAR DROP of 7% in the spring market is NOT good news!

JLM: I'll see you that tax credit deadline extension and raise you. My guess: We're going to see a $16,000 tax credit in 2010.

I'm willing to bet that most of the people who are so negative about the real estate market are renters. They will say anything to justify to themselves that they don't need to own a home. As a landlord I appreciate dummies like you. Just keep those checks coming every month!!!

#8 - Bostonrunner- yes, we are seeing that in some areas in the Greater Boston market. We are also seeing some others areas that have LOTS of foreclosures and short sales on the market, so prices in those areas are still slipping.
Many attempts at short sales may never close because neither the current owner or the property (sometimes both) qualify for a short sale, but that does not seem to keep the sellers and/or their agents from marketing them at low prices that give the illusion that the market is declining more rapidly than it is. Once submitted to the current mortgae holder, many of those bargain properties do not close because the lender will not always approve an underpriced offer just to bail out a homeowner that wants to get out of a property. Also, if the homeowner has cash in the bank or other assetts, the odds of getting a short sale approved are lower. That doesn't seem to keep those properties off the market, though, because many lenders won't even consider a short sale until they get the offer in hand. Unforetunately, when a mis-priced short sale hits the market, it helps to bring other asking price down, even if it never closes.

Coming soon to Mass.

Wall Street Journal

* April 24, 2009, 11:55 AM ET

Foreclosures Set to Soar in California
By Nick Timiraos

California is about to get hit by another foreclosure wave.

Pre-foreclosure notices in the state jumped by 80% in the first quarter of 2009 from the previous quarter, according to a new report from DataQuick Information Systems of San Diego, a sign that foreclosures in California will rise sharply in the coming months.

Foreclosure moratoria and a state law that slowed down foreclosures had artificially depressed new foreclosure filings at the beginning of the year. The newest data shows how those foreclosures are wending through the system as lenders play “catch-up.”

Some 135,000 default notices were sent out in the first three months of the year, an 80% increase from the fourth quarter of 2008 and a 19% increase from the previous year period. That’s higher than any quarter DataQuick has measured since its tally began in 1992.
HUng

If you like it really bad the best is yet to come.

Sam Schneiderman #14 is absolutely correct about short sales.

the worst is yet to come ! home prices to drop another 25 to 50 % in price depending on where you live . guaranteed !! oh yeah . do not pay attention to NAR. nothing but deceit and lies !!

No shortage of schadenfreude on this blog, that's for sure. Sad.

Keep dreaming, and maybe, just maybe, 2005 will come back.

Or, you could live in the present and lower your rediculous outdated asking prices. That *might* help sell your home.

To Foxy @2: Yes, a small-value sale usually indicates an estate or other in-family transfer; not an "arm's length" open-market sale. Foreclosures are usually recorded at the price bid at the foreclosure auction (and the banks typically bid the amount owed).

A slowing of the descent may mean a bottom is getting near, but it does not mean the bottom has been reached. Nor does it mean "recovery" is in the cards any time in the near future. Asking prices for houses are still generally too high, and condo prices are ridiculous. Like all things about real estate, some places will get hit worse than other places, but there will be pain everywhere. But the bubble was an aberration, not a normal market, so there's no reason to expect a "recovery" to that kind of market. There's likely to be a long, shallow trough followed by a slow (i.e., normal) rate of appreciation.