April numbers: There’s somethin’ happenin’ here, what it is ain’t exactly clear…
Posted on May 3, 2008
Filed Under Portland, Statistics, Selling Real Estate, Buying Real Estate, Real Estate |
I said before I people and situation watch, because that can give early cues before the numbers catch up:
Nationally the DOW just went over 13,000 - up 13.5% since January - unemployment went down when it was expected to go up, and fresh $600 checks are taking some of the mental agony out of $3.60 gas prices. As headlined on Drudge, traders are betting on the dollar’s gain against the euro for the first time since December, 2005. The Fed rate is now at 2%, Prime at 5% and a 30 yr fixed mortgage still under 6%.
Locally - and I fully admit it’s anecdotal - buyers who’ve been tire kicking for six months are writing offers, some very low but being looked at seriously by sellers. Our office processed seven new sales last Monday, and the pace has kept up. I’ve had more activity on my listings than any time in the last four months (about two months later than the usual spring pickup), and we have an accepted offer on one from young first time buyers, exactly the people who drive the rest of the market.
That’s notto say we’re at the end of anything; it may be a blip, but this is how trends start. The April numbers for the most part are tough. Closed sales will end up down over 40%, continuing a not-very-pleasant trend. But closed sales reflect the market as it existed in February and March; more timely pending sales, though down YoY 24%, are at a number higher than any month since August. The bestnews is the YoY median is down about 3.5%, and down 8.3% from the peak last August (Wait! Is it possible that has something to do with the uptick in activity??). It’s at best a general indicator - all real estate is local - but my very best guess (for you, Git) is that it’s going to drop another 5% before we’re done.
Here are the numbers; note they’ll adjust somewhat for the next week or so. As always, click on the image for a two page pdf:
Median Price (sold):
Pending Sales:
Total Homes For Sale:
As prices are trending down, so is supply.
Month’s Supply of Inventory:
7.3 months, based on pending sales; RMLS calculates based on closed sales, and will be likely be over 10 months.
All. Real. Estate. Is. Local.
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19 Responses to “April numbers: There’s somethin’ happenin’ here, what it is ain’t exactly clear…”
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Looks to be more of the same to be honest - it’ll be interesting to see how that blip comes out in the numbers this summer as credit continues to deteriorate.
S&P just downgraded a pile of prime jumbo MBS’s as their default rates continue to follow the same path as their subprime counterparts did.
http://www.housingwire.com/2008/05/02/s-warns-aaa-downgrades-ahead/
“Total delinquencies for prime jumbos originated in 2006 rose 15.4 percent during March, while the 2007 vintage saw DQs ratchet upward by 15.5 percent — keep in mind, that’s on a monthly comparison basis, to boot. Serious delinquencies rose even higher, jumping 22.6 percent for the 2006 vintage and 18.8 percent for”
Thanks for the prediction BTW - I understand it’s hard to predict what’s going on with so many volatile variables in the lending landscape right now.
It’s certainly interesting times we live in.
[…] RE Conversation wrote an interesting post today on April numbers: There’s somethin’ happenin’ here, what it is ain’t exactly clear…Here’s a quick excerptNationally the DOW just went over 13,000 - up 13…. […]
Quoting Drudge and then expecting to be taken seriously? You’re kidding, right?
I probably should admire your unstoppable optimism about where we’re headed no matter how misguided you sound.
Naysayer — With respect, either bring something to the table, or enjoy others’ comments. You’ve said nothing remotely of value.
Jeff — The fact MBS have begun their journey back to mainstream appeal for investors says much about what may be in our future. I’ve been through too many of these downturns to believe much of what the extremists say on either side.
For the record, I’ll offer some real time empirical evidence of what most will think is impossible. This month, (some of them this week) I’m closing several million in new investor purchases of 2-4 unit properties. All but one are 90% loans. Oh, the interest rate you ask? 6%!
So much for can’t get it done. Non-owner occupied loans with decent leverage at very attractive rates.
As usual, good stuff Jeff.
a) There’s a sucker born every minute.
b) The buy-up of real estate by people who can afford to buy and hold, perhaps even lose money for some time is expected. The real estate collapse will just allow those at the top to purchase and control more of the market. Call it the “new feudalism” if you will.
Neither of which will save this sagging real estate market, this economy or your income.
Was that good enough?
Thanks, Jeff.
Just today I heard an investor friend bought a package of ten residential properties in Las Vegas, all in foreclosure. And I’ve talked to out of state buyers today who’ve been sitting on the sidelines for a year and are now ready to buy.
This, of course, is the kind of thing that makes the Naysayers of the world nuts, given their entire existence revolves around the perceived misery of others. Best to ignore him and know that, like so much of the hysterical left, every time he speaks people shift ever so slightly more to the right.
Funny, I didn’t know that where one stood on the real estate bubble was a left/right thing.
And I heard that an investor friend of a friend of a neighbor of my best friend’s wife’s brother-in-law bought 300 houses in San Diego and plans to rent them all out and then buy 400 properties in Portland along with every unsold condo in South Waterfront!
That kind of thing makes me nuts because my entire existence revolves around the perceived misery of others.
That’s why everyone is totally in love with the conservatives and are gonna elect McCain and return the Congress to the republicans and then they’ll make sure all houses in America appreciate at 50% a year!
“The fact MBS have begun their journey back to mainstream appeal for investors says much about what may be in our future”
Uhh - All I’ve seen is the secondary market getting worse with more mark downs up to and including AAA rated tranches - the credit crunch is a long way from over and anyone hoping different is to be frank not looking at reality.
Link above goes to S&P downgrading a pile and warning about some AAA stuff getting dunked.
>the credit crunch is a long way from over and anyone hoping different is to be frank not looking at reality.
To be even more frank, Git, you’re way, way over your head. Jeff handles investors from all over the country - did you notice he actually did what you’re saying he can’t do? - and your link is one click away from here.
“Git, you’re way, way over your head”
When worthless MBS can be exchanged for tbills of course there will be some sales. I wonder whats next…oil for CDOs?
“I’m closing several million in new investor purchases of 2-4 unit properties. All but one are 90% loans. Oh, the interest rate you ask? 6%!”
Awesome…more investor owned properties. That’ll help the residential real estate market recover!!!!
Maybe this Jeff person knows more than JP Morgan.
JPMorgan says no near end to financial crisis: report
Why is it so hard for some people to accept that the party is over and that it was mostly based on greed, hysteria, lies and speculation?
Is there any way to track failed sales due to financing? I think one can track pending vs closed but can it be broken down into financial funding vs home inspection? I think that would be interesting to track, especially in this market and especially since ‘capital availability’ seems to be a factor. I know in my hood of Forest Heights there have been a few houses thrown back on the market after “Sale Pending” had been posted and given the newer construction I doubt it was due to the home inspection process.
I’m really not over my head on this one, I also never said or implied you can’t get 90% LT loans - that requires 10% down - 200k isn’t exactly chicken scratch.
If you can show me someone getting several million in Interest Only 100% LTV No Doc loans I’ll stand corrected.
For those with good credit, cash in the bank and verifiable income / employment you can definitely get the deal done.
And as squeezed pointed out - when you can dump your junk on the Fed / FHA / FNM then yes you can sell your MBS”s on the secondary market - but time will tell how long these entities can provide liquidity without having a solvency issue of their own.
Don’t take my word for it -
http://www.markit.com/information/products/category/indices/abx.html
Even the investment grade AAA stuff has taken a beating recently.
From your link btw -
“Part of the reason for outsized returns, sources told HW, has as much to do with Treasuries as it does with some resumption of buying activity in the MBS market.”
While the market has improved somewhat this month I suspect it’ll get worse when then “other shoe” of Alt-A starts to drop.
I still find Naysayer to be an instigator and nothing else. He does follow his name well and Naysays everything. Did you hear the Real Estate community say that the sky is blue?
>Is there any way to track failed sales due to financing?
If there is, Bearlee, I don’t know it. I can tell you, though - again anecdotally - that there have been a significant number. With the crunch in the secondary market, lenders are hyper-skittish; a loan product can be available one day, gone the next, and buyers aren’t only being scrutinized during early escrow but often just prior to funding as well. 720 is the new 680.
“Did you hear the Real Estate community say that the sky is blue?”
To be fair that’s a stretch sometimes in Portland
http://www.treas.gov/press/releases/hp945.htm
Some interesting comments from the treasury’s Borrowing Advisory Committee on the current state of the economy -
“Committee members were in agreement that the problems in the housing market were significant, and many were concerned that without intervention the problems would grow worse. In fact, housing price data from S&P/Case-Shiller was released hours before our meeting and highlighted that the decline in housing prices is not over but that prices are actually accelerating to the downside. For example, while year-over-year prices were reported to be down almost 13%, prices on a 6-month, 3-month and 1-month basis have declined 21%, 25% and 28% annualized, respectively.”
perhaps if more people had my outlook we wouldn’t be facing The Great Depression II.
Is this what you mean by a rebound in the MBS market?
AIG sees no signs of mortgage asset market rebound yet
NEW YORK (Reuters) - American International Group (AIG.N), after disappointing with a worse-than-expected loss on Thursday, did little to buoy investor spirits on Friday, telling shareholders it does not yet see signs of a rebound in the market for mortgage assets, which have cost it dearly over the past two quarters.