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Thursday, September 25, 2008
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20 comments:
From the Post:
Anxious Would-Be Home Buyers Sit This One Out
http://tinyurl.com/4x5zht
So, did the market of would-be buyers just dry up -- for some time to come?
Going to be a wretched fall buying season and Christmas.
NY Times: Plan’s Mystery: What’s All This Stuff Worth?
Favorite line:
“What are these assets worth?” asked Mr. Breeden. “Sometimes, because of fear or extreme uncertainty in the markets, you get in a situation in which there are no bids at all, or at least no realistic bids.”
They're refering of course to the MBS tranches but, doesn't it sound familiar? Sound like a wishing price seller near you?
Joel and Sonia - I was just looking at the same thing.
It very well could be that the buyer market is going to dry up - close in - far out, everywhere.
If I was buying, I would certainly wait a month or two to see how this all shakes out. If sales really grind down, inventory likely will start to rise again. I think we could easily see a repeat of the the awful months of inventory numbers we saw last fall and winter.
Inside the beltway buyers - this very well could be the thing you were waititg for.
crt, joel and sonia
I just get annoyed with the anecdotal evidence reporting. There are thousands upon thousands of homes for sale and being bought in the area, let the numbers tell the story and then flesh that out with anecdotes, not the other way around. So, yeah, I agree with CRT, this could be a real phenomenon, and if so we'll see it in the sales numbers soon.
Anybody here follow Lawrence Yun? He just wrote in the Realtor magazine that we should tell buyers that prices of Wood and home materials are going up with inflation, so therefore home prices will go up.
Will that work?
Ha!
Frank
FranklyMLS.com (still need beta testers)
And that's why Mr. Yun's next home will likely be made from cardboard...
Hi Cara!
Ask and ye shall receive! :-)
And this is *before* all this hit the fan.
New home sales fall to 17-year low
Sales pace of new homes lowest since January 1991 as prices hit a four-year low and inventory continues to rise.
http://tinyurl.com/4z9gdd
I'll keep watching the 6-10 homes I've been keeping my eye on for some time (some on the market now for 400 days & over)
Cara's right - the facts will play out over time.
I'll see where thing are:
1) after the election
2) after the Bailout package goes thru ( or doesn't !!!)
3) after the dismal Christmas season confirms to everyone that we are in a recession
We'll see where RE prices are when the cold winds of February blow.
I'll start my lowballing then to see who *really* has to sell
Like one of the Post bloggers wrote
"I'm not paying 800K for a house you paid 400K for in 2002."
( Ashburn & PWC I'm speaking to you!)
Voices on the bailout are being recieved:
Consitutients make themselves heard NYTIMES
Anger, lots and lots of anger, but it's not clear to me that the representatives are taking away the strongest possible message.
"Representative Candice S. Miller, a conservative Republican from Michigan,... “I would say it’s the most concerned I’ve been since I’ve been in Congress,” said the congresswoman, a former Michigan secretary of state who won her House seat in 2002. “I appreciate all of the input that I’m getting from my constituents, but I’m just not reacting to that — I can’t until I understand it better and feel comfortable with my vote. And I’m not sure how I’m going to be voting yet.”
Frank: didn't a bunch of mills shut down this year because lumber is less than half the price it was in 2005?
Frank,NovaWatcher,
Price of a house will be determined by the market; builders will take a loss if the cost of building is higher than the market price. This feedback loop will work its way back to lower demand for materials and consequently lower prices. It may take time, but hasn't it always been that way?
tedk,
100% agree, prices eventually determine costs, not the other way around.
You sure you don't believe in Austrian economics? :-)
frank,ted,gte,novawatcher,
Novawatcher's point I believe is that prices are already determining costs. I heard the same thing on NPR months ago about decling wood prices shutting down mills in Canada or Seattle or something. But yeah, the housing construction slow-down has already reduced the cost of supplies.
It's hilarious that realtors are being told to use commodities inflation as an argument to "BUY NOW or BE PRICED OUT FOREVER! Mwha ha ha ha!"
I guess NAR doesn't read the news:
COLUMBIA FALLS, Mont., September 24, 2008 (press release) — Plum Creek’s finger-joint stud manufacturing facility in Kalispell, Mont., will suspend operations for the rest of the year. The company will monitor the market to determine if and when demand for the re-manufactured wood product made by this plant increases sufficiently to warrant resuming production.
(content on job cut numbers deleted for brevity)
“This specialty wood product is used almost exclusively in new residential construction,” said Hank Ricklefs, vice president for Northern Resources and Manufacturing. “Market prices are depressed and don’t currently cover the costs of production. We reduced shifts in January, hoping to avoid a production stop, but unfortunately the market has not changed. We will re-evaluate the FJ Reman business throughout 2009 to determine if we can resume production at this facility.”
Regarding Yun and "rising" material costs, here is an excerpt from U.S. Gypsum’s latest quarterly financial report:
"Shipments of SHEETROCK® brand gypsum wallboard totaled 1.9 billion square feet during the second quarter of 2008, a 21% decline compared with 2.4 billion square feet in the second quarter of 2007. U.S. Gypsum’s nationwide realized selling price for SHEETROCK® brand gypsum wallboard averaged $109.81 per thousand square feet for the second quarter of 2008, a decrease of 23% compared with $141.97 in the second quarter of 2007."
Yep, a 23% price decline means that material costs sure are on the rise!! Yun has no credibility. None.
Any readers opposed to the current bailout being discussed by congress-- It appears that there are plans for a protest on Sat. Below I have cut and pasted CathyG's post from CR. Perhaps I'll see some of you there.
CathyG writes:
If anyone is in DC or able to get there by Saturday, the folks at FedUpUSA are planning a protest:
http://www.tickerforum.org/cgi-t...-www? post=62255
UPDATE: Thursday 4:00 pm
OK, we have a verbal go ahead from the Capital Police. They have been most helpful in fast tracking the permit. I will have final approval in the AM, but make plans to be there.
Right now, I need anyone local to DC to get in touch with me to do a little planning.
Most importantly, please get the word out to any and all websites, blogs etc that we will be rallying in DC this Saturday on the West lawn. We have the area from 10:00am to 6:00 pm.
Even if the bill has already been voted up or down, we need to make our voices heard!
CathyG | 09.25.08 - 5:23 pm | #
Hot off the wires - WaMu is dead:
"In what is by far the largest bank failure in U.S. history, federal regulators seized Washington Mutual Inc."
Bye, bye Washington Mutual. The no-doc, negative amortization borrowers will miss you!
JP Morgan is going to take over the operations.
Just a fact here:
Commodities, schommodities...
Labor constitutes 60% or more of the cost of construction, and labor prices have not gone down, so factor that in your calcs.
Anyway, all the bids I hear about in commercial construction have been coming in higher than expected for years now, and its not getting better...yet.
WaMu... and one more loser cashes in its chips.
With the bailout plan looking more and more problematic we really might end up looking at a situation where more than a couple of its friends join it soon.
So far things have been pretty orderly. I wonder how bad things would have to get before it wasn't business as usual on main street.
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