September 13th, 2022 by MG
The National Association of Realtors (NAR), can always be counted on to find some way to positively spin the real estate market. However, over the last few months, they’ve been losing more and more positive items to spin. Their last seemed to be the median housing price, which had still been something that could be spun into “market shows sign of stability” terms. These were always used by news and media to disprove the wild rantings of folks claiming that Arizona and other states are truly experiencing a Housing Bubble and housing shortage.
This is why it was so surprising to hear this from the NAR forecast:
“The median resale price probably will slip 1.7 percent to $218,200 this year, the Realtors’ said. That would be the first national decline since the Great Depression in the 1930s, according to Yun. The new-home median selling price probably will fall 2.2 percent to $241,100, the report said.”
With increasing amounts of inventory, stale days on market times for listed properties, and continued inability for most Americans to dependably find 100% financing – I don’t see this coming to a quick close in 2008 either.
Here’s more from Bloomberg: “The National Association of Realtors reduced its home sales forecast for the ninth time this year and said the housing slump will extend into 2008.
Existing home sales will fall 8.6 percent in 2007, exceeding the 6.8 percent drop estimated a month ago. New-home sales probably will decline 24 percent on top of an 18 percent fall in 2006, the Chicago-based trade group for 1.3 million real estate brokers said today in a statement.”
” The two-year housing decline is worsening amid a surge in credit costs and the collapse of more than 100 mortgage companies after defaults by homeowners. Federal Reserve policy makers, who meet next week, said at their last session “tighter” credit is putting the U.S. economy at risk.
“There’s been an unusual hit to home sales, starting in March when subprime problems emerged and more recently when problems spread to jumbo loans,” Lawrence Yun, an economist for the group, said in the forecast. Jumbo loans are those over the $417,000 limit guaranteed by Fannie Mae and Freddie Mac and are typically given to borrowers with good credit. ”
““To say home prices are going to go up next year, you have to wonder what the NAR is thinking,” said Alex Barron, an analyst who follows homebuilders for Wayzata, Minnesota-based Agency Trading Group Inc. “We’re going to see a drop in volume and prices.””
” The U.S. housing decline may last as long as four years until 2009, Moody’s Investors Service said in a report yesterday. That would match the length of the downturn that ended in 1991. Home sales will take a “substantial hit” in the next several months, Moody’s said.
“Even prime-qualified borrowers have found it harder to get a mortgage,” Joseph Snider, Moody’s senior credit officer, said in the report.
About 14 percent of domestic banks have raised standards for mortgages to their best-rated customers and 56 percent have made it more difficult for people with limited or poor credit to get loans, according to a Federal Reserve survey of senior loan officers in mid-July. ”
“The housing decline is taking a toll on homebuilders. Five of the largest companies reported combined losses of $1.85 billion and took charges of $2.9 billion to write down land values and abandon property options in their most recent quarters.
A Standard & Poor’s index of the 16 biggest homebuilders dropped 49 percent this year through yesterday, led by Beazer Homes USA Inc. and Hovnanian Enterprises Inc.”
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