Housing Bubble Running Out Of Stupid People
thehousingbubble2.blogspot.com
Business Week has this update on the DC market. "Psssssfffffft. That's the sound of the air finally leaking from the real estate bubble in Loudoun County, Va. By October, agents had 2,908 existing Loudoun houses on the market, an increase of 127% over a year earlier. The average time on the market had climbed 62%, to 42 days, since the fall of '04."
"And in just two months, from August to October, the median sales price for houses dropped from $506,100 to $480,000. In kitchens and coffee shops from Purcellville to Leesburg, anxious homeowners swap stories about a market rapidly going soft: The real estate agent who gets 10 to 15 e-mails a day from developers now offering price cuts of $10,000 or more to move new houses. The sign installer who's putting up three 'For Sale' signs for every two that he takes down."
"What's happening in Loudoun is a rapid shift in psychology, a classic sign of a market turn. The buoyant optimism that fueled speculation and expectations of ever-rising prices is now succumbing to the fear of being left standing when the music stops. Real estate, the hottest play of the century in Loudoun, is rapidly cooling."
"Jim Williams, of the Northern Virginia Building Industry Assn., knew the 'feeding frenzy' had gotten out of hand when a waiter in a restaurant he frequents confided that he had bought four houses on spec. 'I'm sitting looking at him and thinking even with tips...he must be dying on the vine.'"
"Now, investors' scramble for the exits is creating problems for owners like Omar Singh, 29. His townhouse in Sterling has been on the market for $525,000 since October. He's hoping to hold out without cutting his asking price until April. But, he says, 'I might not be able to.'"
"Loudoun's real estate community insists the market is merely reverting to a more normal state. 'We're coming back to more of a balance,' says Karen Overheu in Loudoun County. 'You don't have to make up your mind [about buying a house] in an hour or risk losing it to someone else. It's a little insane to have it the other way.'"
"There's another explanation, says insurance agent Joe Kelly over lunch downtown at the Leesburg Restaurant. 'They ran out of stupid people.'"
Friday, December 09, 2005
Sellers 'Sharply Reduce Prices" In Boston
thehousingbubble2.blogspot.com
The Boston Globe has the latest on that market. "Boston-area homeowners trying to sell their houses are sharply reducing asking prices, in some cases, by $100,000 or more, in response to the sudden slowdown in the real estate market. The median price of a single-family home in Massachusetts has dropped 7 percent in the past two months, to $349,000 for sales that closed in October."
"But reductions in asking prices of 10 percent or 20 percent are now common in both high and moderately priced neighborhoods, according to real estate agents and listings of homes for sale. In Cambridge, price cuts averaged $300,000 in a sampling of a dozen houses listed in the $1.25 million to $4.3 million price range. In suburbs like Tewksbury and Hopkinton, homes originally listed for around $500,000 have been slashed to the low $400,000s."
"'It's unbelievable,' said (agent) Polly Drinkwater, who has dropped the price on one of her listings $550,000, or 22 percent, since March. These ''are very large drops,' she said."
"Last February, Gary and Susan Kazmer were confident of selling their Foxborough home for $949,900. But it attracted little interest at that price, and (realtor) Gil Campos in Foxborough lowered the price to $899,000 in early August. Since then, it has been reduced four times, to $800,000. 'That's an unbelievable spiral,' he said. The Kazmers' limbo ended this week, when they accepted an offer, which Campos declined to disclose."
"'It never would've sold if it hadn't been reduced,' he said. But, he added, 'Once you're in that price-reducing mode, all the vultures are out, the people looking for a deal. I've had the most ridiculous offers I've ever had.'" |
