Excerpted from cnbc.com:
Diana: Anecdotally, I was doing a report on a residential street in Northwest DC last week, an area that is still holding its own and didn’t lose much in the housing crash. I was standing in front of a “For Sale” sign, when the Realtor from the sign came out of the house. She wanted to know what we were saying about the neighborhood, concerned of course that there were any signs of cracking. I assured her there were not, but asked about the house she was selling.
The Realtor told me it was actually under contract, after about 35 days on the market. I asked why there was no “under contract” sign, which used to be so commonplace before the “sold” sign goes up. She said they hadn’t had the inspection yet, although the house looked, at least from the outside, to be in very good condition. When I asked if she worried about that, her answer was, “You never know these days.” Apparently the jitters are widespread, even in one of the nation’s most secure housing markets.
With so much of the current housing market comprised of distressed property sales, and with the Realtors unable to capture so much of that share in their data, uncertainty is certainly understandable if not mandated. I read a report today citing Barclay’s analyst Stephen Kim of Barclays Capital, who is upgrading builders and raising price targets on the premise that we will see a housing “rebound” in 2012.
I read a report today citing Barclay’s analyst Stephen Kim of Barclays Capital, who is upgrading builders and raising price targets on the premise that we will see a housing “rebound” in 2012.
“In the absence of a government homebuyer incentive, prices for non-distressed home sales have stabilized for almost a year. In our opinion, this is the most important trend in the housing industry right now,” notes Kim. “We are amazed at how little attention it has been getting from the media and the Street. This stability on the part of non-distressed prices has occurred despite a very high share of distressed activity and continued declines in overall prices.”
I’m not sure where he’s getting that stabilization. CoreLogic reported home prices in September, excluding distressed sales, fell 1.1 percent in September. Their chief economist Mark Fleming cites a supply and demand imbalance and adds, “Distressed sales remain a significant share of homes that do sell and are driving home prices overall.”
We obviously have to be very careful reading today’s housing market tea leaves. There are so many different indicators and so many different entities reporting these indicators, that it’s often hard to find out what’s really going on.
That’s why I always go back to the Realtors on the front lines. They are telling us that this market, distressed or not, is skittish and undependable. A 20 percent cancellation rate for existing sales is shocking and does not suggest a rebound on the horizon. At best, I’m looking for simple stabilization.
JtR: Skittish and undependable are qualities included in ‘stabilization’.
When there are fewer sales to begin with, and wider variety in the quality of what’s selling; there are going to be hot spots – and low spots.
I don’t think Diana or others in the mainstream media are open to seeing the hot spots. They focus on national stats – even though about a month ago she did an aboutface and suggested that the only stats that matter are local. But since it has been more of the national blend.
She says she “always goes back to the realtors on the front lines”. She did in this case and her interpretation of what she heard seems biased. Not that my fellow agents are that adept at judging actual market conditions, but let’s see how many times Diana quotes a local realtor in 2012.