Housing Doom

The big headline in yesterday’s Arizona Republic was Luxury Home Sales Soar.  Here’s what they said about the luxury market:

Luxury homes, the elite properties spread across Paradise Valley, Scottsdale and certain pockets of the metropolitan area, are selling well and at higher prices. There’s been a sharp spike in the number of million-dollar properties sold since 2000, but the bigger story is the increasing prevalence of deals for $3 million, $5 million and much higher, a clear sign that the Valley is moving into the big leagues of luxury homes.

I haven’t graphed those $3M+ property sales yet, but my guess is that we spiked in 2005, and are coming back down the other side, just like the rest of the market.  However, we are definitely up from 2000.  This was the quote that surprised me though:

Old assumptions about the Valley’s luxury-home market no longer apply. A $1 million house used to be a rule-of-thumb definition of where the luxury market started. These days, $1 million buys a nice condo in the Phoenix area.

Read the rest of this entry »

Halloween is tomorrow, and the US mid-term election comes in eight days.  Which is scarier for housing?

Read the rest of this entry »

Two Minute Warning

The GSEs, and especially Fannie Mae, have many Democratic Party friends in Congress. With control of the House, and possibly Senate, likely to change away from from the Republicans a week Tuesday, the Administration is looking to a lame duck session as a last best chance to tighten up regulation over the next few years.

Read the rest of this entry »

Life is getting tougher for home sellers in Las Vegas.  According to this morning’s Las Vegas Review Journal:

Many homeowners in Las Vegas are "upside down" on their home mortgages, owing more than their home is worth, largely because lenders came to rely on inexperienced appraisers who predicated their business on speed and fees in the past few years, a local real estate appraiser said.

Linda Rheinberger, President of the Greater Las Vegas Association of Realtors (GLVAR), recommended last June that homeowners who don’t have to sell now reposition their homes as a rental property. Increasingly more homeowners have been trying that strategy, rather than trying to come out of pocket at closing when they can’t sell for what they owe. While apartment rentals have been in shorter supply due to condo conversions, it is becoming harder to rent out single family homes.  Here’s the graph of properties listed vs. sold. (Data from GLVAR):

Read the rest of this entry »

Cheaper by the dozen!

In yesterday’s Arizona Republic classifieds was an ad under "Investment Properties":

*Attention Investors* Phase 1 close-out special for limited time only!  Purchase class "A" Scottsdale condominium units in bulk at 15%-20% discount off current pricing, Min. purchase-5 units.  David 312-XXX-XXXX
Read the rest of this entry »

The Dow index keeps setting records. As if we required more evidence we’re facing perhaps the greatest sucker rally [1] of all time, even the authors of Dow 36,000 have surfaced.[2] If you have been reading Doom for a while, you might have seen some assertions that the housing market is important to the larger economy. Look at the top of our homepage and you’ll see a claim that the boom has popped. Shouldn’t this be a problem for the larger economy? Fear not. The CEO of Countrywide, America’s largest mortgage lender, whose mortgage profit dropped 40% last quarter, calmly tells us that there was a hard landing all right, but it’s already mostly over.[3] Lucky for us the larger economy has brushed off this little inconvenience with no significant damage ("It’s only a Flesh Wound!")

Read the rest of this entry »

No, I’m not recycling the same graph

Contrary to how it appears, I am actually capable of making graphs that go up, I just don’t get the chance very often anymore.  (I suppose there’s always foreclosures…)  I’ve had to resort to different color schemes, to make it apparent I’m not graphing the same thing.  For example,  here’s the latest new home median price appreciation (depreciation) graph:

Read the rest of this entry »

It’s been a busy week for news in the Bubblesphere.  We’ve had all kinds of news- HB orders are down, existing home sales are down, new home sales are down.  Spin however is way, way up. 

David Lereah, chief economist for the NAR says, "This is likely the trough for sales,"  Angelo Mozilo, CEO of Countrywide said, "We’ve already had a hard landing."  I suppose with those authoritative decrees from such prominent gentlemen, we should probably redirect the site to "Housing-is-all-better.com." and find something else to talk about.  On the off chance though, that the housing downturn hasn’t completely disappeared from your part of the country (after all, real estate is "all local" you know) - here’s your chance to tell us about any links, comments, insights, whatever that you have stumbled upon.
Read the rest of this entry »

Yesterday the National Association of Realtors (NAR) reported the following on the RESALE market:

Sales fell 1.9% to a seasonally adjusted annual rate of 6.18 million in September, the lowest sales pace since January 2004. The decrease was slightly larger than the consensus expectation of a drop to 6.23 million, according to a survey conducted by MarketWatch.

Today the Commerce Department announced the following on the NEW HOME market:

The sales pace picked up, rising by 5.3 percent to a seasonally adjusted annual rate 1.075 million homes. It marked the second consecutive increase in sales following three months of declines.

Now let’s see, why would resales GO DOWN, and new sales go UP?
Read the rest of this entry »

In an article Wednesday  from MSNBC they said:

In an Oct. 20 note, Richard Berner, chief U.S. economist at Morgan Stanley, says he still believes the housing slowdown is far from over. "Nonetheless, the latest data suggest that the intensity of the housing decline may be fading somewhat, and with it some of the concurrent downward pressure on housing prices."

For my response to that, I thought it best to speak via a chart (data from National Assn. of Realtors):

Read the rest of this entry »