National Association of Realtors
Data through October 2012 from the Standard & Poor’s/Case-Shiller home price indices paints a not-too-pretty picture for Chicago-area residential real estate. Sandra Guy wrote on the Chicago Sun-Times website yesterday:
The Chicago-area housing market continued to lag national numbers, posting the largest non-seasonally adjusted single-home price decline — 1.5 percent from September to October and 1.3 percent year-over-year — of 20 major cities in the Standard & Poor’s/Case-Shiller national home price index released Wednesday.
Of the 20 cities, 12 saw housing prices drop.
(Editor’s note: Italics added for emphasis)
Recent rising prices have led to claims the U.S. housing market is in recovery-mode.
However, doubts remain. AnnaMaria Andriotis reported on the MarketWatch website on December 20:
But experts say that spike is largely due to the limited number of homes on the market. There were about two million existing homes available for sale at the end of November, which equates to the lowest housing supply since September 2005, according to the NAR. With fewer homes to choose from, buyers intent on purchasing a property are more inclined to offer a higher price or engage in bidding wars, housing analysts say, which ultimately drives prices up.
The problem is this limited inventory underscores a weakness in the housing market: Many sellers have resisted putting their home up for sale, out of concern that it will sell for far less than they paid for it, says Jack McCabe, an independent housing analyst in Deerfield Beach, Fla. That’s set off a domino effect. Because they’ve held off, supply has remained limited, in turn pushing prices up. “Prices have gone up in the last year because of this temporary, artificial market,” he says…
Separately, in some neighborhoods, median or average sales prices are rising because the mix of homes selling has been shifting toward higher-end, more expensive properties — not necessarily because the value of the typical home is rising, says Jed Kolko, chief economist at Trulia.com, a real-estate listing site. Sales of existing single-family homes priced at $1 million or more increased 52% in November from a year ago, a trend that’s been in play for most of the year, according to the NAR.
(Editor’s note: Italics added for emphasis)
More later on these doubts…
By Christopher E. Hill, Editor
Survival And Prosperity (http://www.survivalandprosperity.com)
Guy, Sandra. “Chicago-area home prices see steepest drop nationwide: report.” Chicago Sun-Times. 26 Dec. 2012. (http://www.suntimes.com/business/17230482-420/chicago-area-home-prices-see-steepest-drop-nationwide-report.html). 27 Dec. 2012.
Andriotis, AnnaMaria. “The real meaning of rising home prices.” MarketWatch. 20 Dec. 2012. (http://www.marketwatch.com/story/the-real-meaning-of-rising-home-prices-2012-12-20). 27 Dec. 2012.
As it concerns residential real estate in America, we’ve now gone from this…
“Suzanne Researched This Commercial”
DEFENDING HOME OWNERSHIP
Home ownership is under attack. There are those who would take away programs that help people become home owners, remove tax benefits like the mortgage interest deduction, and make it more expensive to attain and maintain home ownership. The decision to own a home is a very personal one, but we believe that anyone who is able and willing to assume the responsibilities of owning a home should have the opportunity to pursue that dream.
-National Association of Realtors ad text on page 103 of the August 2011 issue of Popular Mechanics magazine
Housing Rebound Ahead?
June 6, 2007
The latest housing headlines come from the National Association of Realtors (NAR), which is reporting that home sales and prices in 2007 will decline more than originally forecasted before picking up later in the year. A month ago, the NAR predicted that existing home sales would decline 2.9% and home prices would drop only 1%. Now, the Association is calling for a 4.6% decline in existing home sales to 6.18 million units. They also forecast that the U.S. median existing home price will fall 1.3% to $219,100. The NAR is also revising its new home numbers. The median price for new homes will fall 2.3% to $240,800 with new home sales declining 18.2% to 860,000 units. Last month, they predicted new home prices would remain unchanged with sales totaling 864,000 units. The trade group, representing more than 1.3 million real estate professionals, has revised its forecasts downward several times since the beginning of the new year.
The NAR continues to predict the first annual decline in the median national existing home price since it began compiling data in the late 1960s.
However, the National Association of Realtors did offer a glimmer of hope for the beleaguered housing sector. “Home sales will probably fluctuate in a narrow range in the short run, but gradually trend upward with improving activity by the end of the year,” says Lawrence Yun, an economist for the trade group. In 2008, existing home sales are projected to rise 3.7% to 6.41 million units. The national median existing home price is forecast to rise 1.7%. The median new home price is expected to rise 2.6% next year as well.
It is still too early for the National Association of Realtors to call an end to the housing bottom. The sub-prime mortgage debacle has led to a tightening of lending standards, making it impossible for a growing number of potential homeowners to get credit. Also, the rising number of foreclosed properties is adding more supply to the inventory glut. ZipRealty Inc., a national real estate brokerage firm based in California, just released a report showing the number of homes listed for sale in 18 major U.S. metropolitan areas at the end of May was up 5.1% from the previous month. This is important because on a national basis, housing inventories have typically remained unchanged in May over the last two decades, reflecting the fact that May is a peak home-selling month as families are moving during the summer vacation. The growing inventory of unsold homes will continue to put downward pressure on prices as well as sales, since the remaining buyers will hold off until better bargains come along.
Housing Slump Ends In 2 Months
June 22, 2007
In an interview with Bloomberg on Tuesday, Bank of America’s Chief Executive Officer Kenneth Lewis said the U.S. economy will pick up speed due to a recovery in the housing sector. Lewis predicted, “You’ll see the economy begin to pick up in the third and fourth quarters, and the slowdown in home sales is just about to be over.” He went on to say that the housing market will begin to improve in the next month or two, forestalling a recession, according to Bloomberg. Lewis believes that job growth will lift home prices and reinvigorate construction by early 2008.
However, as Bloomberg pointed out, Mr. Lewis’ views contradict those of other market watchers, including money manager Paul McCulley of Pimco. At a Bloomberg News panel discussion on Tuesday, McCulley insisted that, “The housing-market recession ain’t over. It’s going to be a long, protracted recession.” Some are willing to go farther than that. Mark Kiesel, executive vice president of California-based Pacific Investment Management, said in Bloomberg yesterday, “It’s a blood bath. We’re talking about a two- to three-year downturn that will take a whole host of characters with it, from job creation to consumer confidence. Eventually it will take the stock market and corporate profit.” Nouriel Roubini, a former Treasury Department director under the Clinton administration and head of Roubini Global Economics in New York, added, “It’s not just a housing recession anymore, it looks more and more like an economic recession.” Roubini believes the chance of a recession in 2007 is at “50-50,” greater than the 33% chance former Federal Reserve Chairman Alan Greenspan was calling for back in March.
It will be interesting to see just how Mr. Lewis’ housing prediction pans out 2 months from now. I’m circling August 19 on my calendar!
Paulson Weighs In On Housing
July 3, 2007
Today, U.S. Treasury Secretary Henry Paulson spoke to Reuters about a number of economic issues, including housing. Paulson said the U.S. economy is healthy, despite problems with the subprime mortgage sector. The former chairman of Goldman Sachs stated that the downturn in the housing market is “at or near the bottom. It’s had a significant impact on the economy. No one is forecasting when, with any degree of clarity, that the upturn is going to come other than it’s at or near the bottom.” Beyond subprime mortgage woes, Paulson declared that the financial markets looked sound. He said, “Markets are volatile. I haven’t seen a single thing that surprises me- it’s hard to surprise me.”
There have been a number of stories in the news lately pointing to the end of the U.S. housing slowdown. Newshounds and regular readers of Boom2Bust.com might recall some of the more recent ones:
• June 18- The Coldwell Banker Previews International Luxury Survey showed more than half of affluent homeowners expect their property value to appreciate at least somewhat during the next year, with one-tenth of respondents expecting significant gains.
• June 19- Bank of America’s Chief Executive Officer Kenneth Lewis said the U.S. housing market will begin to improve in the next month or two, forestalling a recession. Job growth will lift home prices and reinvigorate construction by early 2008.
• June 26- A Boston Consulting Group survey revealed that 55% of Americans believe they can sell their house for more now than a year ago. Nearly three-quarters believe they can sell their homes within the next 6 months at a price they set, and 63% feel that real estate is a good or excellent investment.
I have a pretty good idea that realtors and others dependent on a healthy U.S. residential real estate market are welcoming such statements. Maybe they’ll back off of real estate columnist Mary Umberger, who said yesterday in the Chicago Tribune that, “Real estate agents complain to me that every time there’s a news story about declining home sales, consumers send up a collective screech and run to the sidelines, further suppressing the marketplace.” Umberger talked about the Coldwell Banker and Boston Consulting Group surveys and had this to say:
Obviously, one might point out that a real estate company has a vested interest in promoting positive attitudes about the market, but I’m inclined to believe that both studies do reflect Americans’ conviction that real estate — that is, their real estate – won’t let them down. It’s not unlike the way that every parent of every toddler thinks their little darling is a genius. And it’s why sellers in the last year or so have clung so hard to asking prices that are way too high.
While wishful thinkers refuse to lower asking prices, the inventory of unsold homes continues to grow. As prices inevitably fall, so will consumer spending (no more housing ATM) and eventually, the financial markets.
Surprise, Mr. Paulson!
Christopher E. Hill, Editor
87,086 Unique Visitors in 2013
355,845 Unique Visitors from
Please Rate this Blog HERE
- Missing ABC7 I-Team Info About Illinois Concealed Carry Security Breach
- Quote For The Week
- Record Net Worth Result Of Fed Blowing Bubbles In Housing, Stocks?
- Chicago Police Superintendent Garry McCarthy On IL Concealed Carry Licenses: ‘Stand By And Watch What Happens’
- How Prepping Saved Many Alsatian Jews From the Nazis
- Moody’s Downgrades Chicago’s Credit Rating Again, Issues Negative Outlook
- HSBC: China, Not Investment Demand From West, Now Steering Gold Prices
- The Civic Federation Proposes Plan For Achieving Long-Term Fiscal Sustainability In Illinois
- Illinois Gun Owners To March, Lobby In State Capital Tomorrow
- Expert: Southern California Megaquake Possible, Economic Loss Could Exceed $200 Billion
- Editor on Can 4-Methylcyclohexane Methanol Be Filtered From Contaminated West Virginia Water?
- Fred H on Can 4-Methylcyclohexane Methanol Be Filtered From Contaminated West Virginia Water?
- Kurt A on Free Online Survival Training Summit Starts Monday
- My Info on Chicago Named A Top ‘Hellhole’ In America
- Editor on On TV: Doomsday Preppers ‘The Time of Reckoning’ Review
- Prep Mister on On TV: Doomsday Preppers ‘The Time of Reckoning’ Review
- james on JM Bullion Presale Of 2014 American Silver Eagles
- Rob Dawg on JM Bullion Presale Of 2014 American Silver Eagles
- Editor on Peter Schiff: ‘The Fundamentals For Gold Have Never Been Better Than They Are Now’
- Editor on Merry Christmas