Existing Home Sales Stink Up the Joint

by Alex Stenback on September 26, 2006

Existing_home_sales
Lot’s of chatter all over the place on the widely expected poor showing for existing home sales.  We are on the fly today so cannot drill down too far into the data, but have posted some relevant links below.  BUT.. before we get all worked up over these figures, remember that:
1.  This is just a one month snapshot.
2.  Though this is the first YOY drop in existing sales since 1995, our guess is (haven’t the time to dig this up today) we would not need to go back very far before these numbers the current median sales price and overall sales would have been record setting.  2001? 2002? 
3. Was this a surprise to anyone?  Really?
4. A 1.7% Price Decline is not what a "popping bubble" looks like (though the landing may be a little bumpy.)

Linkage:
Home Prices Drop for the First Time in 11 Years [cnn/money]
Real Estate Sales Slump Generating Ugly Press [bigpicture]
Welcome Correction or Burst Bubble? [WSJ]
Home Prices Hit Wall [Chicago Tribune]

{ 3 comments… read them below or add one }

Real Estate Investor Loans September 26, 2006 at 7:08 pm

I figured that a lot of this hoopla would make the popping bubble turn out to be just a little air escaping. We’ll see how much air is let out.

Chuck September 27, 2006 at 6:52 am

Cover story on Sunday’s Pioneer Press:

http://www.twincities.com/mld/twincities/15587100.htm

“In Scott County, a sheriff’s deputy said they are serving foreclosure notices on expensive homes in the Wilds, a planned community in Prior Lake built around a championship golf course.”

“We’re starting to see a lot in the $400,000, $500,000, $600,000 range,” said Deputy Duane Jirik. “It’s unbelievable.”

“A wave of ARM resets is upon us.”

“At least 145,000 Minnesota homeowners have ARMs, according to LoanPerformance.”

Editor September 27, 2006 at 8:00 am

Thanks for the link Chuck.

Foreclosures are definitely up, though as a percentage of total mortgages the foreclosure figures are vanishingly small – rising foreclosures make great headlines, but are far from epidemic.

Without question another sign that the real estate market is softening – though I would not go so far as to call it a popping bubble.

ARM resets combined with falling rates in 2007 will likely spur a mini refinance wave.

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