Articles at the end of July indicate that the long-awaited reversal to the housing market has begun.
For-Sale Signs Multiply Across U.S.
Our Quarterly Analysis of 26 Housing Markets Shows Supplies Rising in Many Areas as Prices Slip
July 20, 2006
The housing market continues to weaken in much of the country as inventories of unsold homes rise and many sellers cut their asking prices, a quarterly survey by The Wall Street Journal shows.
There is no sign of a broad collapse of housing prices about a year after the once-hot coastal markets entered a long-anticipated cooling phase. But the general level of prices is edging down in some areas and leveling off in others, while the supply of homes for sale keeps rising.
The number of homes on the market in Orlando, Fla., for example, is nearly five times the year-earlier level, while the inventory has quadrupled in Phoenix and Tampa, Fla., and nearly tripled in the Washington, D.C., area.
In another sign of the housing market's growing weakness, the Commerce Department said housing starts fell 5.3% last month from May, to an annual rate of 1.85 million.
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Many Realtors say the media have overplayed weakness in the market. Richard A. Smith, vice chairman and president of Realogy Corp., the real-estate brokerage business due to be spun off from Cendant Corp. soon, says 2006 "will be the third best year in the history of the business" in terms of total home sales, despite the cooling trend. The National Association of Realtors projects that sales of previously owned homes will fall 6.7% from last year's record.
While many investors have been scared out of the market, Mr. Smith says, plenty of other people must buy new houses because of changes in their lives, such as a new job or a divorce.
Others sound more cautious. "I do think we're going to see some tougher times ahead," says Scott Anderson, senior economist at Wells Fargo & Co. in Minneapolis. By August, he says, most cities in California will be showing modest declines from a year earlier in home prices, and prices also may decline further in parts of Florida, Nevada, Arizona and the Northeast.
Home Sales Fell By 1.3% in June; Inventories Rose
July 26, 2006
Home sales declined last month while inventories swelled to the highest levels since 1997, the latest sign that the housing market continues to cool. Consumer confidence, meanwhile, stabilized.
The National Association of Realtors said sales of existing, or previously owned, homes fell 1.3% to a seasonally adjusted annual rate of 6.62 million units in June from a revised 6.71 million in May. When compared with June 2005, sales were down 8.9%.
Home prices, meanwhile, were little changed overall but varied considerably by region. The national median existing home price was $231,000 in June, up 0.9% from June 2005. That was the slowest monthly year-over-year price increase since May 1995.
Meanwhile, inventories rose 3.8% to 3.73 million existing homes for sale in June, which is a 6.8-month supply of homes at the current sales pace. That was the highest inventory level since July 1997 and compares with a 4.4-month supply in June 2005.
