home sales

Do you think this is purely due to home buyers' credit expiration or is there something else that influenced the big drop?

in the words of alan greenspan: "there is a flaw in the model"

http://baselinescenario.com/2010/08/23/housing-in-ten-words/

When volume picks up we'll see better price discovery. For now, we're simply walking around in the dark.

I figured someone would post here about that news.

Declining sales and rising inventory means there is a mismatch between what sellers think their house is worth and what buyers are willing to pay. The error would appear to be on the part of the sellers who don't want to admit that the value of their houses has fallen. The most likely (but not guaranteed) outcome is lower prices in the future. Good for buyers.

HOWEVER, it's not clear how this affects the Manhattan and good parts of Brooklyn market.

Flmaoz. This was so hard to predict.

http://www.urbandigs.com/2010/08/manhattan_re_needs_more_invent.html

UD's take on Manhattan inventory (posted yesterday):
"Active inventory is declining as supply is simply not coming to market right now. Very seasonal. For Manhattan, I currently show Active Inventory at 7,013; down another 8% in the last 3 months. Expect this pace to rise again as we get past Labor Day and into October & November. In the meantime, motivated buyers will just have to deal with limited options for a few more months."

So far we have declining sales AND declining inventory. The national statistics don't necessarily have any relationship with New York's local markets. I don't see prices declining much further here, especially for the low end of the market in good neighborhoods. I for one am pretty tired of the crummy inventory and would like to see more availability.

Actually Inventory's been declining for at least 4 months now. And price hasn't increased.

And I agree inventory has been stale, but I suspect there is endless reserves to fill the pot when called upon. What I have found disturbing is inventory has been acting as a lagging metric to in contracts a little too much. It suggests substancial manipulation to me.
Without two straight quarters of substancial price per square foot increases in sales market, health has to remain seen as poor.

Ud?????? Huh? No effect on NYC re? How about the slow bleed on equities that's the direct result of a double dip bigger than the first? What the f'k is that dude smoking? He's like sam miller mini me. A shill till the end.

Is inventory declining because those who want to sell don't want to do it at the price they are likely to get? Are sellers still thinking "I am going to sell but I will wait another 6 months before I put it on the market and hope for some kind of recovery?"

UD's numbers are for ACTIVE inventory. Doesn't include apts that couldn't sell near ask and were pulled to wait for better times. Doesn't include the 8900 new condos in shadow inventory that the wsj reported 2 weeks ago, doesn't include the vacationeers who are waiting or the people that don't have a clue about RE so don't know that they better sell now if they have to get out in the next couple of years.

smart people can make mistakes. i begged and begged my sister-- who is a brilliant engineer-- to sell her house three years ago. she didn't even consider it because her youngest daughter was in last year of high school. now she needs to sell. she is not alone.

@evnyc:

"I don't see prices declining much further here, especially for the low end of the market in good neighborhoods."

I do. I very much doubt that a ratio of median home price to median household income of 11 to 13 in Manhattan is sustainable, given the current economic environment where the government stimulated temporary upturn is over and the economic recession is likely back. The other boroughs don't look much better. According to Trulia, sales prices in the Bronx are still more than 40% higher than 5 years ago. And with all the excuses why the prices in Manhattan wouldn't come down much more from here (foreign buyers, Manhattan was special etc.), what are the excuses for the other boroughs that they would sustain price to income ratios or price to rent ratios significantly above the historical normal, despite deflationary pressure, recession or even a depression?

rootless: well said. price to income has been abominable for years. it has been sustained only by leverage -- and govt. stimulus. that chapter of our financial history is now over. The result can only be downward pressure on prices.