So Much for the Slowdown…But Wait

by Alex Stenback on September 28, 2005

The latest existing homes sales data released by the National Association of Realtors has once again confounded those predicting a real estate slowdown.  From the Associated Press:

"[S]ales of existing homes rose 2 percent in August to a seasonally adjusted annual rate of 7.29 million units, a sales pace exceeded only by 7.35 million units in June. Economists had been forecasting a slight decline, believing that the red-hot housing market finally was beginning to cool off."

· Us Home Sales Jump to Second-Highest Level Ever [AP via Yahoo]

Despite the Ever Upward! tone of the article, we are starting hear some anecdotal reports, both from local agents, and around the web, that even if things aren’t slowing down, the balance of power is shifting in favor of buyers in certain market segments.  For Instance, the following blog, from left -coaster Bradley Inman, of Inman News:

"Yikes. Walked into an open house on Sunday in my suburban San Francisco Bay Area neighborhood. The place was immaculate — beautiful new expanded kitchen area, nice carpeting, a new redwood deck, impeccable landscaping, fresh paint, a new fence, large corner lot, spacious storage shed.
The only other person we saw in there was the desperate Realtor (didn’t have the guts to tell her we just bought a place last year). The house has lingered on the market for months already, even after a price reduction and numerous enhancements. Just about a year ago the place probably would have had multiple bids before the homeowner could whisper "sell."
Oh the times, they are a-changin’."
· The Inman Blog

Or this, from the ever-intrepid PropertyGrunt:

…As far as buyers are concerned this seller’s market is so OVAH!.  They are no longer tolerant of the current prices since it does not reflect the current reality. There is more inventory on the market and interest rates are on the way up. And with all of this chaos ranging from the hurricanes, oil prices and the long term police actions occuring overseas, it seems that irrational exuerbance is running its course.
· Report from the Open House Front

Anyway, this all could just be the sign of a "normal" fall slowdown, and all the chatter about buyers markets and homes languishing may just be blowback from Realtors and sellers (many of whom have never operated in a non-booming market) accustomed to 5+ years of white hot sales.  It may be time to adjust our expectations, rather than declare the market soft.

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