RealtyTrac.net is reporting:
More than 1.2 Million Foreclosures Reported in 2006
The Top 5 States with highest Foreclosure Rates are
1. Colorado
2. Georgia
3. Nevada
4. Texas
5. Michigan
The Top 5 Metros with highest Foreclosure Rates are :
1. Detroit
2. Atlanta
3. Indianapolis
4. Denver
5. Dallas
The December Home Price Data came out yesterday, for the markets which report on monthly basis. For those reporting on a quarterly basis, I will make a second post when it is available.
Top on the list is the US Median, which has declined in four of the last five months of 2006. In December it remained unchanged from the previous year.
The top five states with a statewide median declining in the last few months of 2006.
1. Michigan
2. Ohio
3. Massachusetts
4. Florida
5. Colorado
Other Major Markets in year over year decline in the last few months of 2006.
1. Washington DC
2. Minneapolis
3. Dallas
4. San Diego
5. Sacramento
6. Las Vegas
I found a Census Bureau Table which shows the Increasing Number of Completed Homes for Sale.
It shows the cumulative effects of Speculative Building And Increasing Buyer Cancellations. Also why Builders are giving huge discounts and incentives to get rid of these units.
The decline in Housing Starts that began in May 06, is now starting show in the number of completed homes. It takes about 5-6 months from start to completion of a home.
The Census Bureau released the December Housing Starts Today.
Dec 2006 annualised starts are at 1,642K down 27.5% from 2,265K of Dec 2005.
Also the Annual Housing Starts are out too.
2006 Starts were 1,801K down 13% from 2,068K of 2005. (The Second Graph in the above link)
Just like everything else in Texas!!
Houston and Dallas are in a home building boom that rivals Atlanta.
Here is the Community Total for all the major markets.
I have counted 1,112 new communities in Houston itself. (541 Public Builders, 571 Other Builders). Lennar alone has 134 Communities in Houston.
Dallas has 914 new communities (377 Public, 537 Other Builders).
Atlanta stands at 1,011 communities (196 Public, 815 Other Builders).
Compare that with Phoenix (604) and Las Vegas (417).
Sure these three Metros have attracted 500K-600K new residents in the first half of this decade, I still think it is massive overbuilding.
Texas could top Florida’s Housing Growth this year!!
Orlando(377) + Tampa (325) + South East Florida( 138) + SouthWest Florida (292) = 1,132 Communities in Major Florida Markets.
Houston(1,112) + Dallas (914) + San Antonio (239) + Austin (245) = 2,510 Communities in Major Texas Markets.
The recent proposed sale of this water front community is getting a lot of press.
“Most of the 488 shareholders in the ocean-front trailer park are set to become millionaires as a result of Wednesday’s vote to sell the community of aging aluminum single-wides to a Palm Beach developer for $510 million.”
Obviously owners are delighted as they stand to get very rich from this deal. I hope they have not celebrated too early.
This is at the very end of the article.
“The earliest closing date proposed by the developers, March 2009, is also the earliest sellers could see their windfall, leading some to speculate that the deal might be undone by shifting markets and waning enthusiasm for coastal building.”
First I thought the developer must be nuts to buy this property at this time, when there is already a glut of water front high rise condos in South Florida. A prominent Florida Home Builder St. Joe is getting out of the home building business.
The developer is keeping his options open to see where the market heads in the next year or two. I think that any project in Florida that does not break ground this year, has little chance of getting built.
Looks like Las Vegas has finally started to crack up.
The Nov Median was 308K, down from 310K in Nov 05.
The December Median further declined to 306K, down 6K (2%) from 312K in Dec 05.
So may be my 2006 prediction for Las Vegas was’nt totally off.
It was defiant for a very long time. It held pretty steady
at 310K from Sep 05 to Oct 06.
Given it’s meteoric 55% yearly rise from Jun 03 (180K) to Jun 04 (280K).
This may be just the beginning of the bigger meltdown of The South West Triangle encompassing Las Vegas, Phoenix and Southern California.
Median home price is a widely accepted and popular measurement of home values.
The midpoint of all sales. Half the number of sales are above that price, and half of them are below it.
Today I want to address one scenario where the Median can fail to register dropping home values in a given market, especially in the New Home Market.
For example the Builder was selling a home for 300K in Nov 2005. And as the market slowed down, to keep the inventory moving, by Nov 2006, the dollar values of incentives had reached 50K. These can come in the form of paying the buyers closing cost, paying HOA’s for a year, kitchen & appliance upgrade, free pool and things like that. The registered price of the sale still stands at 300K. But compared to last year the same 300K is buying a lot more house than it did in Nov 2005.
The house that was sold in Nov 2005 for 300K, is only worth 250K in Nov 2006. A 50K drop is 16% year-over-year drop in value. But the median is failing to register this drop in home prices.
The same is true for existing home sales if/when some kind of incentives are offerred. Though they may not be as generous as the builders offers.
So I think it is about time that the industry comes up with a “Incentive Adjusted” Median Sales Price, just as we “seasonally adjust” employment/unemployment and a lot of other data.
In it’s monthly sales reports, NAR keeps saying that the Resale Inventory is stabilising.
Let’s see the Monthly Graph of Homes For Sale.
Both in 2005 and 2006, there is a sharp increase in the inventory from the beginning of the year to summer. And then from summer to the year end, it remains near unchanged.
For year 2005 : Feb (2.33) To Aug (2.84) a 21% Increase. Then was at the same level in Dec (2.84) .
In 2006 : Feb(2.98) To Aug(3.84) a 29% Increase. And is virtually unchanged in Nov(3.82)
If this annual pattern of inventory increase, 2005(20%), 2006(30%) repeats itself 2007(40%).
Could the inventory rise 30% to 40%, again by the summer of 2007?