House Prices Slide as Property Glut Grows - Continued
Some Exceptions
With some exceptions -- including Seattle, Houston and Manhattan -- prices generally are flat to declining.
At the same time, delinquent mortgage payments -- a precursor of more foreclosures -- are on the rise. Lenders sent 46,760 default notices to California homeowners in the first three months of this year, more than double the year-earlier tally and the highest in nearly 10 years, according to DataQuick Information Systems, a research firm in La Jolla, Calif. Defaults were particularly prevalent in Sacramento, Riverside and San Joaquin counties.
Using nationwide data, Moody's Economy.com, a research firm in West Chester, Pa., found that Miami, Houston and Orlando all had big jumps in the proportion of borrowers who were behind on loan payments in the first quarter.
Not all delinquent payments or defaults lead to foreclosures, of course, but most experts are expecting a sizable increase in foreclosures over the next year or two as home prices weaken. That will add to the glut of homes for sale.
In areas near new construction, sellers of older homes are up against builders determined to cut prices as much as necessary to shed inventory. "We're marking our inventory to market across the country," Donald Tomnitz, chief executive of D.R. Horton Inc., said in a conference call with analysts last week.
Lennar Corp., another big builder, is experimenting by offering a couple dozen new homes in the Palm Springs, Calif., area for auction on RealtyBid.com. For one group of Lennar condos in La Quinta, Calif., originally priced at around $430,000, bids were between $251,000 and $257,000 yesterday. The auction ends May 8.
Boston, which started to weaken three years ago, is now showing signs of stabilizing. In March, area listings were down 11% from the bloated level of a year before. Agreements to buy homes in the first 23 days of April totaled 1,894, up 2.8% from a year earlier, according to MLS Property Information Network Inc. in Shrewsbury, Mass., but the median price in the latest period edged down 1.2% from a year earlier, to $415,000.
Cooling in Strong Markets
Some of the strongest markets have recently shown signs of modest cooling. In the Portland, Ore., area, listings in March totaled 10,557, up 87% from a year earlier, according to Regional Multiple Listing Service, which operates the multiple-listing service there.
In the Houston area, where oil-industry strength has buoyed demand, March listings rose 12% from a year earlier to 37,671. Pending sales edged up 2.7% from a year earlier, and the median price for single-family homes stood at about $151,000, up 5%.
Manhattan remains strong. Real-estate broker Corcoran Group says home listings there totaled 8,234 in March, down 11% from a year earlier. That shrinking inventory reflects a surge in sales in the first quarter, when the median price for condos and co-op apartments increased 1.2% to $835,000, says Jonathan Miller, chief executive of Miller Samuel, an appraisal firm.
Mr. Miller says Wall Street bonuses and hedge-fund profits are fueling the market, while the weaker dollar attracts European buyers. But listings on Long Island and in the New York borough of Queens totaled 31,954, up 18%, according to the Multiple Listing Service of Long Island.
Realtors are looking for reasons to be hopeful, but few expect a rapid turnaround. In Vero Beach, Fla., the condo supply is enough to last more than 33 months at the current sales rate, says Sally Daley, owner of Daley & Co. Real Estate. Even so, she says more people are out looking for bargains. "We really think the worst is over," she says.
--Michael Corkery contributed to this article.
Write to James R. Hagerty at bob.hagerty@wsj.com |
