UBS Sees Home Prices Down 10% in 2007 (Janet Morrissey in MarketWatch, Nov. 6th): "Home prices will fall 10% on average in 2007 and it will likely take three years to clear out the huge inventory of empty unsold homes currently in the market, according to a UBS report released Monday... UBS analyst Margaret Whelan estimated that the industry overbuilt to the tune of 900,000 homes between 2003 and the first half of 2006... "It will take about three years to shift all of that excess inventory," said Whelan. As a result, she expects housing starts to fall 15% in 2007 from 2006 levels. [UBS chief economist Maury] Harris is predicting median home prices will fall 10% over the next year, and housing starts will fall by 180,000 units to 1.55 million in 2007 from 2006."
How Well Will Homes Sell? Opinions Differ on Market for New Homes (Palm Beach Post, Nov. 5th): ""The current downturn should last two to five years," housing analyst Jack McCabe says. Bradley Hunter of Metrostudy says new-home sales will pick up in 18 months. The National Association of Home Builders says new-home prices will drop until at least 2008. David Berson of Fannie Mae says prices will perk up in 2009. And Mark Zandi of Moody's Economy.com says the worst of the downturn "is at hand.""
Real Estate Slump Tough on Midwest (CS Monitor, Nov. 3): "South Bend, Ind. – The housing market slowdown is nationwide, yet it has taken its earliest toll in Midwestern communities where the word "boom" never applied to home prices... This region, characterized by slow job growth and gathering problems in the automotive industry and in a business where outright price declines are rare, was the first in recent years to post a drop in prices - with median single-family homes down 2 percent in the second quarter from the same period in 2005. Cities such as Detroit, Cleveland, and South Bend are struggling even though they never had a big run-up. In the industrial heartland of the Midwest... land is relatively cheap. In South Bend, "It's a way different market, towards the bad side," from just a couple of years ago. Some communities are doing well, thanks to good schools or newer homes, but in many parts of town homes are listed at $50,000 or less - and aren't selling. One home is listed for such a low price - $17,500 - that the monthly mortgage payment would be about $87, about the same as the property tax."
Home Builders Try to Offset Sagging Sales (The Gazette, Nov. 2nd): "One Colorado Springs area home builder is offering landscaping, a sprinkler system and special financing to woo buyers... The number of single-family home-building permits issued in El Paso County plunged 45.5 percent to 188 in October compared with the same month last year, according to the Pikes Peak Regional Building Department."
Is This Really 'A Great Time to Buy or Sell a Home'? (Barry Ritholtz in Seeking Alpha, Nov. 6th): "In fact, its such a good time, that the National Association of Realtors decided they need to drop $40 million telling you so... [The NYT discusses the National Realtors Association's new ad campaign to coax buyers and sellers in to the market.] "The ad by the National Association of Realtors cites a 4.3 percent increase in the number of existing home sales contracts signed in August, from July, as evidence that “prices over all have stabilized.” But new data released last week by the association showed that contract signings fell 1.1 percent in September, from August, and 13.6 percent from September 2005. A spokesman said that the first ads were prepared before the latest figures were available and would be updated next week. Mr. Stevens dismissed the idea that the campaign, the first of its kind undertaken by the association, could be viewed as a sign of desperation..."
