Monday, April 10, 2006

Year-Over-Year Price Declines on the Way

The number of house sales in the Jersey Shore area and other parts of the country is clearly down, and have been, in various areas, for at least six months. That has not stopped the many of the housing bulls from trumpeting the fact that sale prices have continued to rise. The bulls most consistently cite the fact that prices, on a year-over-year basis, are still higher for the month being compared. The quote from bulls that you usually see is something like “…although the number of houses that sold last month were down xx% compared to last year, selling prices are up xx% from the same period last year.”

In a few more months though, positive year-over-year comparisons are going to end. This is only evident in a few markets, like in Massachusetts, so far, but it is spreading. According to the bubblemeter blog, the market in Washington DC is starting to see year-over-year price declines, although they are small so far.

I doubt that Realtors will be as motivated to point out price declines as much as they have been to point out price increases, however, I think that the public will eventually notice and that those who are selling houses will lower their asking prices more than they already have.

11 Comments:

Blogger Bubble-X said...

Thanks for the post on us. We really appreciate it.

On your post, while we have not seen price reductions impact the numbers -yet- there really isn't any market that can sustain drastic increases in inventory like this one is seeing. Not only that, but inventory has been increasing without demand going down. Now, we are at the point where we have both inventory and declining demand. It sure looks like a perfect storm is going to hit the shore- and everywhere else.

Now, just to set your perspective- we believe that the numbers for the quarter will continue to show drastic increases in inventory, with reduced demand -but also- increased prices. Again, while we see the price reductions everywhere, the numbers have not trickled up yet. We believe they will though, and at that point, there will be a snowball effect (i.e. strong contraction). Thanks again,

Bubble-X

bubbletrack.blogspot.com

Monday, April 10, 2006 7:18:00 PM  
Anonymous Anonymous said...

I called on a few homes "sale by owner" at the Jersey Shore this weekend. I listened to the owner’s sales pitch on their homes, and finally getting to hear their ridiculous asking prices. I told them they were way over priced and declined to make an appointment to see their homes. I think a few more people should spread the message by telling sellers they have out priced themselves.

bh

Monday, April 10, 2006 8:16:00 PM  
Blogger Little Silvered said...

I went to an open house hosted by the owner last week. It is just not as fun or informative as a broker hosted open house, since the owners gnerally don't have a broad enough grasp of the entire local market. In addition, some of the brokers I have met have been quite frank regarding what they think the real price of the house is, which is sometimes well below the asking price.

Monday, April 10, 2006 8:37:00 PM  
Blogger Bubble-X said...

Well, guys, I don’t know if you saw the ultra-POS post we did, but can you imagine calling a place that looks like a garbage dump, and sits next to a Superfund site- then hearing the guy say he wants ONE MILLION DOLLARS?. And the isn't some ocean side site, either! You really just have to laugh.

bubbletrack.blogspot.com

Monday, April 10, 2006 10:36:00 PM  
Blogger Real Estate Expert said...

In the year prior to Hurricane Wilma, which ripped through south Florida in October, 2005, 64 homes had new owners at the Boca Country Club. If you're interested in real estate, a snapshot of the present may show the Housing Bubble has already popped. read more ...

Tuesday, April 11, 2006 4:08:00 AM  
Blogger Boca Expert said...

If a "hot" real estate area cools off, who's going to argue that it does not have larger implications? Boca Raton, Florida, may have some valuable lessons for the real estate industry as a whole. read more ....

Tuesday, April 11, 2006 6:20:00 AM  
Anonymous Anonymous said...

Do you know where to get info on year price changes at the Carolina Coast areas? Especially NC Coastal areas.

Tuesday, April 11, 2006 6:21:00 AM  
Blogger Alicia Bennett said...

This comment has been removed by a blog administrator.

Tuesday, April 11, 2006 12:34:00 PM  
Anonymous Anonymous said...

There's an online poll on the future of home prices on the Jersey shore at http://www.app.com/apps/pbcs.dll/section?Category=BUSINESS

Tuesday, April 11, 2006 1:30:00 PM  
Anonymous Anonymous said...

This week I am seeing more and more houses for sale, and only a few "under contract" that have been "under contract" for over 4 months. I did tell a few RE agents that the houses I saw were over-priced. They agreed with me, but said the sellers still think they can get 100-200k more than the house is worth. They agreed some sellers are pricing themselves out of the market. Then I'll hear a story about one house people are "bidding" over. I don't know if it is just a story, wishful thinking, or some morons are still out there over paying for a house!

Tuesday, April 11, 2006 6:49:00 PM  
Anonymous Anonymous said...

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Wednesday, April 26, 2006 5:41:00 AM  

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