9 replies to this topic

[Russ]

http://www.marketwat.....DB0BA246F1DE}

WASHINGTON (MarketWatch) -- Sales of newly constructed U.S. housing unexpectedly slowed again in February, falling 3.9% to a seasonally adjusted annual rate of 848,000, the lowest level since June 2000, the Commerce Department reported Monday.
Economists surveyed by MarketWatch were expecting an increase in February to about 1 million units. See Economic Calendar.

Edited by Russ, 26 March 2007 - 09:31 AM.

[Cirrus]

After a 2 year wait, I am now looking to move out of my rental in Richmond, VA and buy. I've closely monitored the greater Richmond market for 2 years--builders, neighborhoods, inventory, etc. I spoke with a regional builder last week (upper management). He is still somewhat optimistic--I couldn't understand why given the information he gave me. I was looking in one of their developments (OODLES of lots for sale) that's been open for months and they haven't made a single sale there. They have 9 specs built and are building more. The existing home inventory is so ridiculously large that I'm overwhelmed putting together a list of properties to look at. I try and narrow down the search as much as possible--neighborhoods/area, pricing, sqf. My search over the weekend pulled up well over 500 existing homes in Richmond in just my heavily filtered category. That doesn't include new construction which is unbelievably plentiful. Many ads are "price reduced", "back on market", etc. I have a friend that moved out of the area and owns a house in what was the hottest new neighborhood several months ago who hasn't received a single offer. His house has been for sale since Jan with one price reduction so far. He has only had a few people even look at the home since it's been for sale. The thing that concerns me is that the Richmond market is one of the more stable in the Atlantic seaboard from some of the data I've seen. The jobs market here isn't that bad, either. My take is the builders do VERY poorly here this summer and the market puts in a bottom between summer and winter this year. I do think the market will not rise for quite a while off the bottom though. All guesses on the assumption that LT rates stay reasonably low and the Fed successfully creates a low growth and moderate inflation environment. I'm not trying to buy the bottom but it will be fun bargaining with sellers given the massive inventory in virtually every category. I'm hoping I can find a somewhat distressed seller with a solid amount of equity to jump on a low offer. I see plenty of fun ahead....

Edited by Cirrus, 26 March 2007 - 10:25 AM.

[securelstmile]

After a 2 year wait, I am now looking to move out of my rental in Richmond, VA and buy. I've closely monitored the greater Richmond market for 2 years--builders, neighborhoods, inventory, etc.

I spoke with a regional builder last week (upper management). He is still somewhat optimistic--I couldn't understand why given the information he gave me. I was looking in one of their developments (OODLES of lots for sale) that's been open for months and they haven't made a single sale there. They have 9 specs built and are building more. The existing home inventory is so ridiculously large that I'm overwhelmed putting together a list of properties to look at. I try and narrow down the search as much as possible--neighborhoods/area, pricing, sqf. My search over the weekend pulled up well over 500 existing homes in Richmond in just my heavily filtered category. That doesn't include new construction which is unbelievably plentiful. Many ads are "price reduced", "back on market", etc. I have a friend that moved out of the area and owns a house in what was the hottest new neighborhood several months ago who hasn't received a single offer. His house has been for sale since Jan with one price reduction so far. He has only had a few people even look at the home since it's been for sale.

The thing that concerns me is that the Richmond market is one of the more stable in the Atlantic seaboard from some of the data I've seen. The jobs market here isn't that bad, either.

My take is the builders do VERY poorly here this summer and the market puts in a bottom between summer and winter this year. I do think the market will not rise for quite a while off the bottom though. All guesses on the assumption that LT rates stay reasonably low and the Fed successfully creates a low growth and moderate inflation environment.

I'm not trying to buy the bottom but it will be fun bargaining with sellers given the massive inventory in virtually every category. I'm hoping I can find a somewhat distressed seller with a solid amount of equity to jump on a low offer. I see plenty of fun ahead....

Just be careful buying into a new development where the builder might end up bankrupt. I have seen that situation turn into a mess with some being stuck in the middle of a development that is otherwise unoccupied and then the new builder ends up building condos or smaller homes on the land. Also, the builder that your working with can end up doing a shoddy job if he is running out of money and then you can't get problems fixed.

[Russ]

I don't think the market has bottomed yet. I am showing it will bottom in June of 2009. You should keep track of stats, if the chart of hgx moves above previous resistance of 260-270 that would be a good sign.
http://stockcharts.com/c-sc/sc?s=$HGX&p=W&b=5&g=0&i=p58894581125&r=8841.png

After a 2 year wait, I am now looking to move out of my rental in Richmond, VA and buy. I've closely monitored the greater Richmond market for 2 years--builders, neighborhoods, inventory, etc.

I spoke with a regional builder last week (upper management). He is still somewhat optimistic--I couldn't understand why given the information he gave me. I was looking in one of their developments (OODLES of lots for sale) that's been open for months and they haven't made a single sale there. They have 9 specs built and are building more. The existing home inventory is so ridiculously large that I'm overwhelmed putting together a list of properties to look at. I try and narrow down the search as much as possible--neighborhoods/area, pricing, sqf. My search over the weekend pulled up well over 500 existing homes in Richmond in just my heavily filtered category. That doesn't include new construction which is unbelievably plentiful. Many ads are "price reduced", "back on market", etc. I have a friend that moved out of the area and owns a house in what was the hottest new neighborhood several months ago who hasn't received a single offer. His house has been for sale since Jan with one price reduction so far. He has only had a few people even look at the home since it's been for sale.

The thing that concerns me is that the Richmond market is one of the more stable in the Atlantic seaboard from some of the data I've seen. The jobs market here isn't that bad, either.

My take is the builders do VERY poorly here this summer and the market puts in a bottom between summer and winter this year. I do think the market will not rise for quite a while off the bottom though. All guesses on the assumption that LT rates stay reasonably well and the Fed successfully creates a low growth and moderate inflation environment.

I'm not trying to buy the bottom but it will be fun bargaining with sellers given the massive inventory in virtually every category. I'm hoping I can find a somewhat distressed seller with a solid amount of equity to jump on a low offer. I see plenty of fun ahead....

[Islander]

After a 2 year wait, I am now looking to move out of my rental in Richmond, VA and buy. I've closely monitored the greater Richmond market for 2 years--builders, neighborhoods, inventory, etc.

I spoke with a regional builder last week (upper management). He is still somewhat optimistic--I couldn't understand why given the information he gave me. I was looking in one of their developments (OODLES of lots for sale) that's been open for months and they haven't made a single sale there. They have 9 specs built and are building more. The existing home inventory is so ridiculously large that I'm overwhelmed putting together a list of properties to look at. I try and narrow down the search as much as possible--neighborhoods/area, pricing, sqf. My search over the weekend pulled up well over 500 existing homes in Richmond in just my heavily filtered category. That doesn't include new construction which is unbelievably plentiful. Many ads are "price reduced", "back on market", etc. I have a friend that moved out of the area and owns a house in what was the hottest new neighborhood several months ago who hasn't received a single offer. His house has been for sale since Jan with one price reduction so far. He has only had a few people even look at the home since it's been for sale.

The thing that concerns me is that the Richmond market is one of the more stable in the Atlantic seaboard from some of the data I've seen. The jobs market here isn't that bad, either.

My take is the builders do VERY poorly here this summer and the market puts in a bottom between summer and winter this year. I do think the market will not rise for quite a while off the bottom though. All guesses on the assumption that LT rates stay reasonably low and the Fed successfully creates a low growth and moderate inflation environment.

I'm not trying to buy the bottom but it will be fun bargaining with sellers given the massive inventory in virtually every category. I'm hoping I can find a somewhat distressed seller with a solid amount of equity to jump on a low offer. I see plenty of fun ahead....

------------------------------------------too hopeful and too soon

The housing market is just in phase one of a three phase adjustment: over inventory, Foreclosures and inventory reduction sales, and credit crunch as consumer spending falters and dumps the economy. Historically this means no bottom for three to five years. Put all that in the context of a dollar bust and a probable 100 basis point rate cut by the federal and you can have much cheaper single family shelter if you still want to live here.

[Cirrus]

I think this market will take lots of time to bottom on a national scale...a couple of years to fully bottom maybe. Again, I'm not trying to buy the bottom. I just wanted to buy when I had a large inventory choice and lots of bargaining power. I am NOT planning on buying a neighborhood where there's competition with the builders. Actually, I'm trying to find something in a good neighborhood. I'm looking for a home that's nicely below the current cost of construction per sqft. I actually don't thing the cost of construction will fall much (very little if any) over the next couple of years which should hurt the builders and help bottom the national market.

[redfoliage2]

http://www.marketwat.....DB0BA246F1DE}

WASHINGTON (MarketWatch) -- Sales of newly constructed U.S. housing unexpectedly slowed again in February, falling 3.9% to a seasonally adjusted annual rate of 848,000, the lowest level since June 2000, the Commerce Department reported Monday.
Economists surveyed by MarketWatch were expecting an increase in February to about 1 million units. See Economic Calendar.

It's interesting that data from the Commerce Department and the data from house flippers out last week tell different stories.

[Cirrus]

I'm only really 'in touch' with the SFL and Richmond markets. What I see and hear is a LOT worse than government news or statistics. The statistics are on the national level, however.

[nimblebear]

I have a friend that moved out of the area and owns a house in what was the hottest new neighborhood several months ago who hasn't received a single offer. His house has been for sale since Jan with one price reduction so far. He has only had a few people even look at the home since it's been for sale.

This is the psychology of a market trending downward. Everybody is intenet on a deal, so they wait. And Wait, and wait some more. So its a buyers market. People don't realize the pervasiveness of the problem. Its all across the country. I'd be afraid to buy right now, due to how much equity I might lose on a new one. It could take years to recover. Our market will be affected here, but I am not as concerned right now about the possible loss in equity. The market is fairly transient here, so the appreciation is generally slower but steady.

If markets all across the country are in some form of decline, this thing ain't bottoming for awhile, at least until you start to see some evidence of appreciation or prices stabilizing. People are only now starting to see existing homes drop their price. Its only just begun. The inventory is only going to get worse, because builders that are large need to keep building houses to stay afloat. I expect layoffs will be massive. I think they'd rather build, and cut prices and into margins before they stop altogether. Its probably a last man standing deal as far as builders go.

See where the deals are a year from now. Prices won't do a u-turn on a dime given the inventories.

[Cirrus]

I have a friend that moved out of the area and owns a house in what was the hottest new neighborhood several months ago who hasn't received a single offer. His house has been for sale since Jan with one price reduction so far. He has only had a few people even look at the home since it's been for sale.

This is the psychology of a market trending downward. Everybody is intenet on a deal, so they wait. And Wait, and wait some more. So its a buyers market. People don't realize the pervasiveness of the problem. Its all across the country. I'd be afraid to buy right now, due to how much equity I might lose on a new one. It could take years to recover. Our market will be affected here, but I am not as concerned right now about the possible loss in equity. The market is fairly transient here, so the appreciation is generally slower but steady.

If markets all across the country are in some form of decline, this thing ain't bottoming for awhile, at least until you start to see some evidence of appreciation or prices stabilizing. People are only now starting to see existing homes drop their price. Its only just begun. The inventory is only going to get worse, because builders that are large need to keep building houses to stay afloat. I expect layoffs will be massive. I think they'd rather build, and cut prices and into margins before they stop altogether. Its probably a last man standing deal as far as builders go.

See where the deals are a year from now. Prices won't do a u-turn on a dime given the inventories.

IF I'm able to buy quality in a good neighborhood below replacement cost I'm not worried about buying right now. I know things could get worse but I expect inflation and replacement costs to rise. I do agree with your assessment, though. I am just tired of renting. The selection is HUGE now AND LT rates are low and I don't know how much lower they will get. I think it's a good long-term scenario to try and pick up a bargain. I doubt it will be at the bottom but close enough for a 10 year decision/'investment'.

If the Fed allows a moderate or greater recession along with deflation right now things could get so ugly none of this will matter. I'm banking plenty of my trading, investing and other financial decisions on this scenario. I'm giving myself an out if I'm wrong but I'll definitely take a little hit.