I am always asked, "how is the market?" Everyone wants me to say it is getting better because the historically robust spring market has always added anticipated enthusiasm to the market. However, spring or not we are only four years in this ten year correction cycle. The statistics below are additional measurements as we redefine the bottom.
"February's sales numbers add to the mounting evidence that the housing recovery is hesitating along with the inconsistent progress of the economic recovery," said David Crowe, chief economist for the National Association of Home Builders (NAHB).
"Falling housing prices of existing homes are robbing demand for new houses and until that changes, the housing market will be in trouble,' said Yelena Shulyatyeva, an analyst at BNP Paribas.
The NAHB also noted that "even qualified buyers who are ready to make a purchase are facing frustrating challenges in terms of tight consumer lending conditions and inappropriately low appraisal values on new construction."
Prices will continue to fall until the distressed inventory is significantly reduced and of course, the economy must turn around to bring equilibrium to the supply and demand that we learned about in Economics Class 101.
Thursday, March 24, 2011
Monday, March 21, 2011
The Scale is Still Tipped in Favor of Bad News
(1) Monthly existing home sales are near record lows. New home starts are at record lows.
(2) Shadow (distressed) inventory will take years to clean up.....51 months for New Jersey, 29 months for Florida, months and months where ever you live.
(3) A ship this big on the wrong course will take a long time (3 more years) to return to smooth waters.
Some telegraph messages are good.
Two marketing directors told me that on hand heavy machinery inventory has been significantly reduced in the last 6 months and a recreational vehicle marketing director reported that four wheel vehicles (think golf carts and hunting ATVs) can't keep up in production.
A regional bank is taking a gamble by financing several upper end homes to be built on their existing REO lots........what do they see coming?
(2) Shadow (distressed) inventory will take years to clean up.....51 months for New Jersey, 29 months for Florida, months and months where ever you live.
(3) A ship this big on the wrong course will take a long time (3 more years) to return to smooth waters.
Some telegraph messages are good.
Two marketing directors told me that on hand heavy machinery inventory has been significantly reduced in the last 6 months and a recreational vehicle marketing director reported that four wheel vehicles (think golf carts and hunting ATVs) can't keep up in production.
A regional bank is taking a gamble by financing several upper end homes to be built on their existing REO lots........what do they see coming?
Wednesday, March 2, 2011
Foreclosures Slowing for a Reason
Foreclosures are slowing for a reason.....not necessarily a good one. It appears they are simply bogged down. Broker's Insider reports:
"Foreclosure filings were reported on 261,333 U.S. properties in January, a 1 percent increase from the previous month but a 17 percent decrease from January 2010, according to RealtyTrac. One in every 497 housing units received a foreclosure filing during the month.
January marks three consecutive months with fewer than 300,000 properties receiving foreclosure filings, following 20 straight months when the total exceeded 300,000. However, RealtyTrac CEO James J. Saccacio says that's because lenders are bogged down in reviewing procedures, resubmitting paperwork, and formulating legal arguments, not because housing has recovered."
Inman News reports, "While fewer homes are entering the foreclosure pipeline, it's taking them longer to get through it. Among homes in the foreclosure process in January, the average number of days delinquent was 507, up from 410 days in January 2010 and 319 days in January 2009."
Kentucky had 1,210 foreclosures filed in January 2011, a 22% increase from December, and a 5% increase from a year ago.
"Foreclosure filings were reported on 261,333 U.S. properties in January, a 1 percent increase from the previous month but a 17 percent decrease from January 2010, according to RealtyTrac. One in every 497 housing units received a foreclosure filing during the month.
January marks three consecutive months with fewer than 300,000 properties receiving foreclosure filings, following 20 straight months when the total exceeded 300,000. However, RealtyTrac CEO James J. Saccacio says that's because lenders are bogged down in reviewing procedures, resubmitting paperwork, and formulating legal arguments, not because housing has recovered."
Inman News reports, "While fewer homes are entering the foreclosure pipeline, it's taking them longer to get through it. Among homes in the foreclosure process in January, the average number of days delinquent was 507, up from 410 days in January 2010 and 319 days in January 2009."
Kentucky had 1,210 foreclosures filed in January 2011, a 22% increase from December, and a 5% increase from a year ago.
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