Business Week's Spoonful of Sugar

houses
For all of you owners out there who are tiring of all the depressing news that keeps coming out on the housing market, Business Week tries to cheer you up this week by putting a more positive spin on the National Association of Realtors report of median year-over-year prices falling 1.7% in August. Their two biggest ~~rationalizations~~ reasons for hope? First, the decline in the number of existing homes sold was less than economists expected; the drop was entirely related to condominiums and co-ops. Second, the monthly increase from July to August in the number of unsold homes was only modest 1.5%, the smallest amount so far in 2006. (Who cares if it was the highest absolute amount since April '93.) Don't you feel better now? That's what we thought.
Hopeful Glimmers in the Housing Slump [Business Week]
Photo by KAP Cris

Comments

I wish someone would do a more details report on city to city.
Let's also remember in other parts of the country, closings take only 30 to 45 days. In NY average closing is anywhere between 90 to 120 days (why is that?).

Posted by: AL at September 27, 2006 9:15 AM

Check out Jonathan Miller's blog for a more in-depth NYC analysis. Numbers aren't as bad as CA, for example, but they're not great, and most importanly, he's not a spin man for either case.

Posted by: Anon at September 27, 2006 9:59 AM

serious side, but important question...how long can we continue to call new home construction a good thing - when it inevitably means destroying more farmland and wilderness. obviously we can't base our economy on this kind of growth for ever, but it's still a 'good' 'central' assumption of a sound US economy.
Same goes for Brooklyn - when does it end, when we have the population density of Calcutta?

Posted by: a reader at September 27, 2006 10:02 AM

'a reader' - sounds like you want it both ways. Don't use undeveloped land and don't increase density.
Should all these people just disappear.

Posted by: Anonymous at September 27, 2006 10:06 AM

"'a reader' - sounds like you want it both ways. Don't use undeveloped land and don't increase density.
Should all these people just disappear"

a. you can lower immigration - then we would have a stable population. Seems to me we are just passing on lower standards of living to future generations -do you care? or are you just out to make a buck?

b. you still don't have an answer - where does it end?

Posted by: a reader at September 27, 2006 10:24 AM

Brooklyn has a ways to go before it even reaches its population density of 50 years ago.
Manhattan has a lot further to go than Brooklyn to reach its peak density from over 80 years ago.

Posted by: Anonymous at September 27, 2006 10:43 AM

"Brooklyn has a ways to go before it even reaches its population density of 50 years ago.
Manhattan has a lot further to go than Brooklyn to reach its peak density from over 80 years ago."

Really so why do we need so many more buildings than 50 years ago if much has already been converted to living space from former facturies...doesn't make sense.

Posted by: question at September 27, 2006 11:18 AM

converted from old factories is very small drop in the bucket compared to total housing.
Probably smaller average household size is biggest factor in less density now compared to 50 years ago.

Posted by: Anonymous at September 27, 2006 11:25 AM

It looks like thing aren't all doom and gloom. New home sales just jumped 4.1% in August.

http://tinyurl.com/kzp2e

Posted by: Anonymous at September 27, 2006 12:12 PM

I had the same thought about the New Home sales, until I took a closer look.

The numbers jumped 4.1 percent because the numbers from the prior THREE months were sharply slashed. In other words, the news these past three months has been much worse than thought, and this is at best a very modest bump upwards.

As well, the Federal housing numbers come with the advisory that these particular numbers are notoriously inaccurate and so a four percent jump (or drop) in any given month should be treated as a flatline.

Posted by: michael at September 27, 2006 2:15 PM

Not so fast - new home sales tend to jump in august - buty they're still down 17 percent from last year.

http://calculatedrisk.blogspot.com

Posted by: Alo at September 27, 2006 2:15 PM

A housing report from the New York Sun. “Veteran real estate broker Deanne Esses said eight people in her Upper East Side office on Madison Avenue are leaving their jobs for alternative careers. Those eight represent 20% of the office’s sales staff.”

“That’s only the beginning. Ms. Esses said she thinks more New York City brokers will be leaving the scene. ‘Business here is just not quiet; it has dropped dead over the past few weeks,’ she said. ‘At the same time, there’s a flood of inventory on the market. We run open houses, we run advertisements, but nothing works. There are no buyers, and without buyers, there are no sales.’”

“Ms. Esses made these noteworthy observations: Everything now is negotiated downward from the initial asking price, by a minimum of 5% to 7%. Prices are down at least 10% from a year ago on practically everything.”

“The Upper West Side is moving very slowly. The Hamptons have turned especially soft. ‘We’re in a transition stage where sellers will have to come down in price, and right now it’s a waiting game to see what the buyer will do,’ Ms. Esses said. ‘Since there’s only one Manhattan, I don’t see a crash. But who knows?’”

“Real estate appraiser Jonathan Miller also cites a sharply slowing trend, with actual sales activity flat. There’s a big gap between buyers and the sellers, and more realism will be required by the sellers, he said. His reasoning: swelling inventories, especially condominiums.”

Posted by: Anonymous at September 27, 2006 3:21 PM

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September 27, 2006

Business Week's Spoonful of Sugar

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