Some big bust-related news out this morning.  Existing home sales are have a rough run.  Here's an excerpt from the AP:

Piling on more proof that the housing boom is over, the Commerce Department reported Thursday that new home sales fell by 4.3 percent last month to a seasonally adjusted annual sales pace of 1.072 million units. The decline was the largest since an 11.5 percent plunge in February.

As far as consumer sentiment goes, though, look no further than a poll this morning on Yahoo Finance.  Looks like roughly 75% of respondents think that housing is headed down further.  Stay tuned...

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My apologies for the lack of updates lately.  It seems that just recently, real "bust-worthy" news has begun to trickle in.  From this morning's Associated Press story: 

The slowdown in the once-sizzling housing market is spreading, with 28 states and the District of Columbia reporting spring sales declines, led by big drops in former boom areas of Arizona, Florida and California.

Full Article

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View them Here

For all of you from Tucson, looks like you've made the list this year! 

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Manhattan (REB's home city, by the way) has been throwing many buyers, sellers and brokers for a loop.  Are prices going up or down? Is the market really softening?  Can I bid under the asking price or is that still taboo?

This week, several reports were released with conflicting data about the state of the New York City market.  I'll break down some of the highlights:

• A report by broker Prudential Douglas Elliman's showed a mean price gain from the first quarter to the second quarter of 6.6 percent, to $1.37 million. The median price gained 6.7 percent, to $880,000.
• A second report, by The Corcoran Group, showed that the mean sales price declined 3 percent in the quarter, to $1.247 million. The median fell 3 percent to $775,000. The Corcoran Group also showed 3 percent declines for the year.
• There were an average of 7,640 apartments listed for sale in the second quarter, from 6,904 the prior quarter and 4,965 a year ago, according to Prudential Douglas Elliman. Time on the market also lengthened, to 144 days - that's six days more than the prior quarter. Corcoran found a similar trend.
• The Mean negotiated discount was 3.5%. 

Rising interest rates are causing would-be homebuyers to take a second look at many are opting for rentals.  This is causing rents to rise:

• The mean rent reached a whopping $3,970 for leases signed last quarter, up 15 percent in a year. Median rent was $2,900, up 9 percent.
  

Continue reading "Are Manhattan Prices Going Up or Down? Mixed Messages Released This Week" »

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Remember last month when Real Estate Bust mentioned the Chicago Mercantile Exchange futures market for housing prices?  Although trading activity is relatively light at the moment, The Matrix, another real estate related blog, discusses early observations.  Here is a chart of contract activity over the next year:

Some important things to note here are that 1) traders are betting that Miami has the largest decline over the next year (7.67%) and that 2) The Top 10 City average is roughly a 5% drop.  If you're looking for evidence of a complete bust, perhaps this "soft landing" evidence isn't welcome news. 

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Construction spending fell in May by the largest amount in nearly two years.

The Commerce Department reported that building activity dropped by 0.4 percent in May to a seasonally adjusted annual rate of $1.206 trillion following a 0.2 percent fall in April. It marked the first time in more than three years that construction spending had fallen for two consecutive months. May represented the biggest one-month decline since a 0.7 percent fall in September 2004.

Analysts are forecasting that construction will drop off this year in large part due to rising mortgage rates. 

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With a cool weekend for worthy Real Estate Bust news, lets turn our attention briefly to the Sydney, Australia real estate market, where properties are attractive to many buyers for the first time in over 2 years.  With prices falling almost 10% and wages rising over 12%, observing the Sydney market could be a prudent move for those that are betting on the domestic market's direction. 

Continue reading "To Buy or Not to Buy In Sydney" »

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