Existing Home Sales Rise, Prices Fall

[dullard]

Originally posted by: Syringer
http://realestate.yahoo.com/loans/rate_...l=on&state_code=CA&submit=Update+Chart

In case you didn't know, there's a strong correlation between ARMs and 15/30 year fixed rates.

Vic definately knows there is a strong correlation there. However, Vic's unspoken point is correct: that the gap between ARMs and the fixed loans has shrunk dramatically. When ARMs were ~4%, the 30-year fixed was ~5%. Now they are ~5.5% and 5.75% respectively. Thus, ARMs went up 1.5% while the fixed only went up 0.75%.

 

[ponyo]

Originally posted by: JS80

Originally posted by: dullard

Originally posted by: Vic
Don't listen to the doomsayers. They're the kind who buy high and sell low.

Why do you way that? In my opinion the doomsayers are the people who said don't buy at the all time high we recently reached and instead said wait to see if the prices fall. Now that the prices are falling/have fallen, the doomsayers (me included) think it is a better time to buy. Doomsayers want to buy low. They'd never buy high.

If the real estate market "crashes" it mostly likely means the economy's in the shvtter and no one will be able to afford a home anyways.

I'm still hypothesizing that more smaller homes are selling and less mcmansions, hence the "median" home prices fell. I also hypothesize inventory won't have as much impact on future prices as the doomsayers because housing is not as liquid as commodities/stocks...owners can just refuse to sell and live in the darn house.

I think your hypothesis is wrong on both accounts. I've heard recently on Clark Howard that the mcmansion market (2mil+ homes) are doing very well because the rich are doing well and they're buying bigger and more expensive homes.

Second, inventory plays big part in prices. Owners can definitely refuse to sell and pull their listing. But thousands more will take its place. Lot of purchases were speculative and investment homes. What, people are going to live in 2 or 3 houses?

More pain ahead. We're still in 3rd inning or less.

 

[puffpio]

Is there data on the falling prices per region?..I'm only concerned about Southern California

 

[Slew Foot]

CA prices are in the crapper, moreso in the central valley.

We're looking at 15-20% in term or real declines already when you look at homes that were recently sold that are on the market again.

Be glad you're not the guy selling at a 600K loss: http://flippersintrouble.blogspot.com/

The house Im renting right now sold last year for 440K, the same floorplan two streets over is rotting on the market at 380K.

Inventory is going down now not because people are buying, but because sellers are pulling their listings and hoping to try again in the "hot" spring market. They'll be in for a surprise.

 

[dullard]

Originally posted by: puffpio
Is there data on the falling prices per region?..I'm only concerned about Southern California

The local data is not updated as often. So, the best you can do is to see the average of the 3rd quarter prices (July-Sept, 2006) and how those compared to the same period in 2005. Also, that data is preliminary and it'll take 6 more months until it becomes final. In the end, you get almost a 1-year lag to see the final data.

The original source of the data you want.

CNN's coverage is easilly sorted by state, so I perfer it.

For the 3rd quarter of 2006, median metropolitan prices in California ranged from +5.9% to -3.5% year-over-year.