Existing Home Sales Slow, Supply Rises
A: Lets go national on the more important existing home sales data that was released today. In short, sales pace of existing homes slowed to the slowest level in 5 years while inventories rose to a 16 year high. More of the same for the national housing market outside Manhattan.
From Yahoo Finance -
Sales of existing homes dropped for a fifth straight month in July, falling to the slowest pace in nearly five years, while home prices fell for a record 12th consecutive month.According to CNN Money -
The median price of a home sold last month slid to $230,200, down by 0.6 percent from the median price a year ago. It marked the 12th consecutive month that home prices have declined, a record stretch.
The inventory of unsold homes rose by 5.1 percent at the end of July to a record of 4.59 million units.
Homeowners trying to sell last month faced the biggest glut of homes on the market in about 16 years, as declining sales and growing problems in the mortgage market helped push home prices down for the 12th straight month.Calculated Risk, as always, has great commentary on the housing front and is a must read for any investor seeking to find in depth analysis on housing data and mortgage related news as it breaks.
Not only did sales slip but the number of homes for sale jumped 5.1 percent, the group said, meaning there is now a 9.6-month supply of homes for sale, up from 9.1-months in the June reading. It was the biggest supply of homes by that measure since October 1991.
Here is a great chart from CR showing you the comparisons of inventory (via # months of supply on market) from 2007 so far with the same months of the previous 3 years. I cut off the chart after July because that data for 2007 is not released yet and it wouldn't fit in this site. If you want the full chart, simply click on the table:
You should be able to visualize the inventory problem currently going on outside our little world here in New York City! Nationally, buyers are beginning to see some great opportunities popping up as inventory trends greatly favor buyers and sellers are forced to lower prices aggressively to move property; an ideal situation for any savvy contrarian buyer with a longer term strategy for their investment!
Remember, for those investors seeking to find the bottom you will NOT know when the bottom reveals itself until AFTER it's already too late! Hindsight is always 20/20 and if I was a buyer outside Manhattan in a local market flooded with inventory, desperate sellers, buyer control, and dropping prices my eyes would be lighting up for longer term investment opportunities!
As for Manhattan, well, our inventory has declined 32% since last July! Obviously we are at the other side of the equation!
Posted by gaila
Tue Aug 28th, 2007 10:23 AM
At this moment inventory has declined in Manhattan. Does anyone know how many new developments are in the pipeline through the next two years?
Posted by Bobby
Tue Aug 28th, 2007 11:55 AM
According to NY Times today (see link below), New York inventory is going to rise real fast this year because of new developments. Coupled with decreasing demand, we are up for interesting time.
NYT:
Manhattan will have 6,444 new condominiums completed this year, compared with 1,614 in 2005, according to Halstead Development Marketing. In Brooklyn, 3,768 units should be finished this year, compared with 480 in 2005.
ref.: http://www.nytimes.com/2007/08/26/realestate/26cov.html?_r=1&ref=realestate&oref=slogin
Posted by Bobby
Tue Aug 28th, 2007 12:25 PM
CNN reported that even in NY "Metro Area" housing prices declined 3.4% YoY.
Pls. see table in this link:
http://money.cnn.com/2007/08/28/real_estate/slide_deepened_in_June/index.htm
Posted by ollie
Tue Aug 28th, 2007 01:37 PM
Bobby,
I'm not a real estate agent (or expert)....but I would expect that most of the 6,000 odd completions this year have already been sold many months ago (with the balance currently counted within current inventory figures). In my experience of looking at new developments, they are typically marketed for sale over a year in advance of completion.......
Ollie
Posted by Ronen
Tue Aug 28th, 2007 05:19 PM
Ollie, reading about real estate in the NYC press (including the NYT) is like reading marketing PR stuff from the real estate companies (or pravda in the former soviet union), we are flooded with misinformation and the goal is to keep the momentum of the market. However, highway 61 was revisited, god said to Abraham, "give me a son" and the NYC real estate market will behave like a market, meaning, whatever goes up, must come done unless the socialists feds will rescue wall street again. In wall street they don't like to pay taxes but if they screw up, they don't like to pay the price and look for the government for answers.