“The organization today cut its forecast for the ninth time this year and said existing home sales will fall 8.6 percent in 2007. That’s more than the 6.8 percent drop forecast a month ago. New-home sales will probably drop 24 percent on top of an 18 percent decline in 2006, the Chicago-based group said.”
“For the year, the median resale price probably will slip 1.7 percent to $218,200, the Realtors’ forecast said. That would be the first national decline since the Great Depression in the 1930s, according to Yun. [The new-home median selling price probably will dip 2.2 percent to $241,100…]”
“There’s been an unusual hit to home sales, starting in March when subprime problems emerged and more recently when problems spread to jumbo loans,” Lawrence Yun, an economist for the group, said in the forecast.”
“About 14 percent of domestic banks have raised standards for mortgages to their best-rated customers and 56 percent have made it more difficult for people with limited or poor credit to get loans, according to a Federal Reserve survey of senior loan officers in mid-July.”
∙ Housing Slump Will Extend Into 2008 in Loan Crisis [Bloomberg]
∙ JustQuotes: NAR’s Monthly Moving Target (August Edition) [SocketSite]
Another month, another NAR forecast that will doubtless be as inaccurate as all the previous ones. It’s really too bad that the MSM still gives these cheerleaders any credibility.
I am socking away money to buy in Q1 09. This report helps me justify my strategy. Thanks NAR
An “an unusual hit to home sales”? Is this guy (Lawrence Yun) an economist or a PR representative? I really have to wonder if the NAR realizes the irreparable damage they are doing to their credibility, which is already suspect, over the long term with these kinds of statements.
Dude posted this comment earlier:
Here’s the Bloomberg story:
Countrywide Shares Fall on Report Lender Needs Cash (Update3)
[Editor’s Note: Sorry, the original comment (along with a link to the story) had been moved to the Countrywide specific topic below. And now back to NAR and their forecast…]
Pretty easy to forecast declining sales, when:
64% of subprime homeowners were unable to refinance in August.
57% of all adjustable rate mortgage holders were unable to refinance in August.
33% of all closings were canceled in August due to unavailable financings, including 56% of subprime closings.
That means if you are bidding on a house against 6 other people, 2-3 of them won’t even make it. You don’t even need to be the high bidder: you need only be bid #3-4 now to get the house.
http://www.cnbc.com/id/20723118
Spencer — I think a growing number of sellers are now coming to the realization that buyers are starting to think like you. They want to get out — now, while they still might find a buyer who doesn’t see the writing on the wall. I’ve sensed an increasing number of new listings in recent weeks. My viewpoint might be skewed by a remarkable new number of SFRs being listed in the neighborhoods that I follow, but I have to say that if I thought I would be selling in the next couple years, I would do so now before the trends become crystal-clear, and it’s too late to get anything close to your price. We may have already crossed that threshold . . .
Trip – I get that same feeling. Driving around this weekend, I was amazed at how many open house signs had suddenly sprung out compared to prior weeks. Is it just because it’s after Labor Day? Of course it’s pure conjecture at this point, but the next version of the CII may be telling.
Here is some real data on the increasing supply both in SF (up 25% from this time last year) and in the Bay Area (up 20% from this time last year):
http://www.housingtracker.net/old_housingtracker/location/California/SanFrancisco/?state=California&city=SanFrancisco
http://www.housingtracker.net/askingprices/California/SanFrancisco-Oakland-Fremont/
[Editor’s Note: Keep in mind that the HousingTracker data for “SF” includes Brisbane, Broadmoor Village, Colma, Daly City, Millbrae, San Bruno, and South San Francisco. And while Active listed inventory in San Francisco is up, it’s still (barely) trailing year ago numbers. Sales on the other hand…]
Inventory is an easily manipulated number. Realtors can hold listings off the MLS and tell people about them when they arrive at an open house.
A few have jumped the gun and listed on Craigslist as “pre-MLS” because their brokers won’t let them put the listing on the MLS for fear of showing buyers just how much inventory is really out there.
I saw a report of a speech given by the head of the So Cal association of Realtors begging Realtors to keep off the MLS listings that weren’t going to sell right away. They know that buyers are watching those inventory numbers and so they do whatever they can to keep those numbers low. Obviously, the sellers and their agents want to list on the MLS, but it appears that there is more attention being paid to those numbers and agents are doing what they can to keep them as low as possible.
So they are clearly focusing on that number and you should trust those figures about as much as you trust any other information about how much inventory a salesman has. Which is to say, not at all.
tipster.
Isn’t this called FRAUD?
“They know that buyers are watching those inventory numbers and so they do whatever they can to keep those numbers low.”
The whole real estate market is one big conspiracy. Everyone is out to get you. Buyer beware…etc., etc. Different day, same old material.
Most of the posters on this site (i.e. tipster) would be the most depressing people to have a drink with.
Craig, I don’t understand why tipster and others “would be the most depressing people to have a drink with.” Are you saying that tipster is wrong — that realtors do not time their listings on the MLS so as not to give a true indication of how many willing sellers there actually are? If you are saying that, then I guess I get your point — tipster is a conspiracy theorist and for some reason might therefore be depressing to have a drink with (although, in my experience the only time I actually enjoy being around conspiracy theorist nuts is when I’m drinking).
But I don’t think you are denying, or can deny, that realtors manipulate the listings in this fashion. I saw the same press report that tipster refers to — begging realtors to talk sellers into keeping their properties off the MLS. If realtors are in fact agreeing with one another to do this, it sounds like a per se violation of federal and state antitrust laws. This would be a very serious matter. If you want to convince me that this report is all wrong and realtors never do this kind of thing, I’m all ears.
Trip, from my experience dealing with realtors it is a dog-eat-dog world, beneath all the smiles and handshakes you see on the surface. I have strong doubts that they are all (or even a statistically significant number of them) utilitarian-ists.
I am very curious about these non listed SFR in SF. My own realtor was telling about about 3 or 4 listings comming up in SF that he has that will not be listed on the open market. What is up with this and how often is this happening? Also I track the D4 {SFARMLS} listings very closely have this weekend noticed a huge surge in Open Houses..more than I had ever seen {in the 5 years I have been a resident}
Next call I had was from my broker who said that 50% of his clients can no longer get loans and is has nothing to do with credit scores. Plain and simple if you are in the Jumbo market {which all of SF is} and you are stated income {which I am as well as many of his private practics/business owning clients are} then regardless of 20% down you are out of luck right now… I am in the clear only because I had my loan locked about 20 days ago and I am very close to making an offer on a place but I have this feeling that if 50% of his non-sub prime clients can’t get loans then SF is headed for a world of hurt and HUGE price drops…The median has to head below the JUMBO number in my own opinion
It so happens that this Sunday I went to an open house in the Mission of a two unit building that is not on the mls, no good reason given for that. Of course the agent there suggested that I get an agent because you know I might miss out on one of those oh so great pre-mls deals. Craig it is a conspiracy and these depressing people have no interest to have a drink with a real estate agent.
Anyone can quickly stroll through a screen of CL postings and see how many state “not on MLS” postings there are. I did a 5-second search and found tons:
http://sfbay.craigslist.org/search/rfs?query=not+on+mls&srchType=T&minAsk=min&maxAsk=max
If there is a conspiracy, it’s hidden in plain sight. I’d have drinks with tipster….if only the Greys weren’t watching me.
Changing your query from “Bay Area” to “San Francisco” drops the number of results from 46 to 4: http://sfbay.craigslist.org/search/rfs/sfc?query=not%20on%20mls&srchType=T
Just saying. At the same time I’d much rather have drinks with Tipster than Craig.
that was a pocket listing: http://en.wikipedia.org/wiki/Pocket_listing
The funny thing is, even if the realtors try to time the listings, it has no real effect.
If the “not on MLS” property doesn’t sell, it will eventually be on MLS. So, it only delay the increase of listings, but it will still happen.
If it does get sold without getting on MLS, well, there is one less qualified buyer on the market. So, there is less inventory, but there are also fewer qualified buyers.
Either way, this technique may work if there is a temporary short term supply increase. However, if the supply problem is long term, it doesn’t do anything.
What a wealth of information. I suppose if you’re seriously looking to buy, you need to line up a realtor who will show you the secret “pocket” listings.
Advertising a “secret” listing on craigslist seems to defeat the purpose . . . SS — I guess you need to add those listings to your CII.
“At the same time I’d much rather have drinks with Tipster than Craig.”
Damn. Single tear…
Also, in response to TSOH, I am anything but a real estate agent. I have far too much education to ever justify a career like that to myself.
Wow, quite a controversy I caused. Didn’t realize it would blow up like that.
First, this is neither a conspiracy nor a fraud, it’s good salesmanship. The MLS is NOT a public service, and it is my hope that peoplewill stop thinking that it is. It’s a tool that is used to market homes. Part of marketing is getting people to pay more for something than they otherwise would.
If I owned a car dealership, and I had 100 Camrys come off lease on the same day, do you think I’d be crazy enough to park them all in front of the lot? The buyers would see that and have a field day.
So instead, I’d warehouse them, offer some of the leaseholders a sweet deal to hold them for another 6 months, anything to keep buyers from realizing I had too many of them. That’s not fraud, it’s smart business. And it happens all the time.
So I don’t think anyone is doing anything wrong, except for one group: the people who are citing MLS numbers as a “statistic” when it is SOOO easy to manipulate. The MLS is not a public service, it’s a marketing tool. And, if the benefits of keeping listings OFF the MLS outweigh the benefits of listing, listings over 45 days will come off, properties in neighborhoods where there are already several listings won’t get listed, etc.
In some cities, the number of real estate brokers is very high, and it IS a dog eat dog world, and so keeping listings off the MLS is much harder. The incremental benefit any one broker would get from having lower numbers of listings is small compared with the downside risk of not selling a particular property. And the offices are so small, sharing listings with realtors just in the same organization wouldn’t help very much.
San Francisco is very different. There are a relatively low number of real estate organizations, so it’s easier to share listings that are not on the MLS with people in the same organization and the benefit to the broker of not listing outweighs the loss from not listing, so there is at least the motivation to hold listings off the MLS.
The MLS is not a public service. It exists to serve the needs of the realtors, however they define them. My only point was for people to stop looking at Housingtracker or the MLS as the end all: open your eyes. The inventory is rising faster than the MLS says it is, at least in some cities. And for every Craigslist listing that advertises “not on MLS” or “Pre MLS” or any of a number of similar terms, there are probably ten others not advertised at all.
And by tomorrow, I expect some of those craigslist postings will be quietly removed. Because that will be good business as well.
The MLS is not a public service.
Here is the report of the CAR economist begging agents to stop listing to fudge the numbers.
http://www.pe.com/business/local/stories/PE_Biz_D_appleton-young07.33453a8.html
Tipster,
Is the MLS a public service?
The MLS is not a public service but does have public access and Relators are a professional group, there are good and there are bad… choose wisely also be aware of the dynamics of any deal if a lesson in human nature is needed read the section on real estate in Freakanomics.
Saying that you can buy/sell a house without a Relator but having used one recently if you choose wisely closing a deal can be a breeze.
interesting read
The McMansion Is Shrinking
[The median square footage of a new single-family US house had increased almost 50% since the early 1980s, which had made huge houses a kind of fashion statement. They may soon be out of fashion.]
http://online.wsj.com/article/SB118955679788724507.html
Size of New Homes Starts Shrinking As Builders Battle Housing Slump
By KELLY EVANS
September 12, 2007
The blabbing about non MLS listing is pretty dull and irrelevant, meanwhile nobody responded the “YOU” question. Is it true 50% of clients can’t get (jumbo) loans? Has anybody else heard that? I just can’t imagine how that won’t affect SF prices. But it hasn’t so far, that I can tell.
Anybody considered the alternative to the “secret” non-listing conspiracy? If you were selling your home and the agent asked you not to list it on MLS, what would you say? How many people would actually agree to this strategy? As cited, only 4 properties on CL listed as pre-MLS or not on MLS were in the City. There are always reasons why someone wouldn’t want to list; privacy and not enduring the preperation and burden of having an open house being the main reasons. The other being a private sale and pocketing the commissions.