National, Regional Sales Postg Uptick for Feb.

The National Association of Realtors (NAR) just released its Existing Home Sales data for February (2008). Surprisingly, the sales data showed a modest uptick nationally, with sales of existing single family homes up 2.9% over January. The northeast showed the strongest performance, posting an 11.3% gain over January. Sales are still down compared to the previous year, with sales nationally off 23.8% over Feb. 07, and down 26.4% in the northeast region. Its certainly too early to tell if the one month uptick may indicate some stabilization in the real estate market, but it is the first month to not post a decline over the previous month since last July.

On the price front, the median price nationally was down 8.2% over Feb. 2007, while in the northeast prices were essentially flat year over year, posting a 0.4% increase. But in the northeast, prices didn't peak until last June, and since then the median sales price has posted a 10% decline.

Comments

[CP]

It's a red-herring. Prices will fall more, especially in Sullivan County, especially land in Sullivan County.

Without the artificial stimulus of unqualified buyers getting mortgages and speculators, there is, and will be an oversupply of homes for the foreseeable future.

[DS]

Which means that buying now is the equivalent of trying to catch a falling knife.

[Mal]

I agree with CP that current financial dynamics will continue to constrain the pool of buyers - except perhaps for the low end of the market. But even qualified buyers are unlikely to be impressed by yet another optimistic NAR press release. The familiar NAR spin is apparent in quotes like: "Lawrence Yun, NAR chief economist, said the gain is encouraging. 'We’re not expecting a notable gain in existing-home sales until the second half of this year, but the improvement is another sign that the market is stabilizing.' "

Fine... except that the NAR has said this several times in the past year or so, and been wrong each time. The lack of sincerity, and the clear self interest, repeatedly apparent in NAR releases and quotes from Lawrence Yun (and from predecessor David Lereah) has created a strong reaction of distrust for many of us -- e.g., as summarized by Daniel Gross in Slate last December: "Worst. Forecasters. Ever? The Cockeyed Optimists of the National Association of Realtors."
http://www.slate.com/id/2179605/

[CP]

Over the last month, we have been seeing a tremendous tightening of underwriting criteria and caution on the part of banks. You have to feel sorry for the mortgage brokers, who are working 20x harder to get each deal closed. And if you don't have 20% down, forget about it.

Although, to counterpoint DS, there are some very good deals to be had - not every seller can wait forever and not every realtor will accept overpriced listings. And the second home market for good houses priced right, is as hot as ever. The lack of quality houses and property for sale between $230k and $325k is shocking.

[ak]

"...there are some very good deals to be had..."

One will suffice. Your turn.

[Chuck]

ak -
3 examples
1. Old farmhouse - 1400 sq ft , 3 acres, brook, 2 outbuildings, Eldred NY - $220k
2. Anything Catskill Farms builds - www.thecatskillfarms.com
3. foreclosures are dotting the sullivan county landscape - prices for foreclosed properties (ie desparate banks) are reaching a point where buying and fixing up, or buying and flipping make sense. - foreclosure.com

[Chuck]

ak -
and offering 40% under the listing gets you close to what the property is really worth, post exhuberance and unqualified buyer inflation.

[David Knudsen]

Chuck, such as shameless plug! By your logic, do you mean that a Catskills Farms house priced at $300,000 is only worth $180,000? Part of the problem I'm seeing is that buyers are having a tough time discerning value, and as a result, believe that everthing is only worth 60% of what is being asked, which just isn't the case. The farmhouse you mentioned in Eldred was listed at $215,900 and just closed at $205,590 --- or 95% of asking price. That house was one of my favorites in the last 6 months, in terms of what you got for your money. (Still a bit of a tough sell, though, because it's only 2 bedrooms.)

mal, I think its important to separate the NAR data from the NAR spin. I've long thought the 'analysis' by NAR's economists was little more than self-serving propoganda. I've seldom seen a verb stronger than "easing" in a NAR press release, but then the media are prone to the other extreme, using words like "plunge" and "collapse" when "trending downward" or "slipping" would be more accurate. The national and regional NAR data, in and of itself, is actually quite good.

[POL]

The worst in real estate is yet to come. We are quite a few years away from 'bottom". Since when is bottom reached when supply is stronger than demand? When supply and demand are equal (maybe by 2012), bottom will have been reached. I hope sellers in the Hudson Valley and Catskills get used to this depressed market. It is nothing else but depressed and will remain so for many years to come. We have been accustomed to speculation and suburban sprawl since 2002. 1990-1999 all over again but much much worse. Paying at 60% of asking price in many instances is still not a good deal.

[POL]

The worst in real estate is yet to come. We are quite a few years away from 'bottom". Since when is bottom reached when supply is stronger than demand? When supply and demand are equal (maybe by 2012), bottom will have been reached. I hope sellers in the Hudson Valley and Catskills get used to this depressed market. It is nothing else but depressed and will remain so for many years to come. We have been accustomed to speculation and suburban sprawl since 2002. 1990-1999 all over again but much much worse. Paying at 60% of asking price in many instances is still not a good deal.

[tt]

POL

It should make for an interesting mix. "New Yorkers" and an extended, prolonged decline. I can't wait!!

The question now is: Can we "inflate" our way out of the mess? They're going to try.

[Klipo]

Starvation is setting in.
only tiny bungalows are selling. forget the stuff over 200k.
Raw Land can't even be given away for free.
I don't remember this since the 1970's

[David Knudsen]

Actually, Klipo, that's not true. In March, of the 21 'single family' sales in the Sullivan MLS, only 2 could be categorized as 'bungalows'. 9 of the 21 sales were over $200,000, including one sale at $750,000 and one at $1,075,000. So 43% of the sales were above $200,000.