Down here, developers are cutting back on building. They are giving away upgrades like crazy to unload inventory, and reducing prices to boot. Existing home sales are tanking with nearly twice as many on the market as there were a year ago with listing times increased by a substantial amount as well. I do not see why anyone should be surprised. All systems self correct, given enough time.

The Invisible Hand is still at work!!

I have a client that does business with a small builder in Riverside, CA. He says the builder built a group of houses, priced them at $550K, and not one person showed up to even look. Dropped to $450, still no bites. He's at $350K, and still hasn't sold any.

Two words: Statistical anomaly. It doesn't mean anything. Six months from now when this month's figures are revised and finalized we might find out it was a rounding error. Look at trends that last more than the latest month's sales data before you get excited.

Things are starting to move here in Phoenix. My house is slowly moving up again...

Then again, Joe, you are not exactly in the "metropolitan" area. Your neck of the woods is where everyone in Phooeynix would love to move!!

Bob,

I planned it that way. Whenever I am looking at buying a new house I always look for the best school zones and figure out which direction everyone is moving, then buy on the fringe. I usually stay in a house for 4-8 years and by the time I am ready to move have done very well. Plan on doing it with this house as well!

Good plan!!

I know I live within the City Limits of the Old Pueblo, but I could never live in a place like central Phx. Too big, too busy, and too transitory.

Exactly!

Noise it is.

Some homebuilders are looking at a rebound starting in 2009. That's right. They're writing off 2007 & 2008.

The biggest runup in home prices is followed by the shortest and softest landing in history??? Pass the hashish, OK.

I have to take pictures around town here in Florida.

There are so many houses that construction was started on and the builder just walked away leaving the house unfinished with weeds growing in the dirt. Adandoned.

Yesterday I saw a set of form boards on a vacant lot, set in place ready for cement, they look like they were put in about 7 months ago by the looks of all the weeds growing where the cement should be.

That said, two years ago 80% of my business was from builders. I have now shifter gears, hooked up with some companies that deal only in closings on existing homes. Now 80% of my business is in resales.

I am preparing surveys for about 50 closings a week.

There are still way too many home for sale in this area. It will easily take 2-4 years for the supply to be depleted.

NEW home sales. Not existing ones.
New homes are getting smaller and have barely enough dirt under them to support the foudnation. Plus the developers are scrapped for cash and are dumping to move product.
Existing home sales are the ones to watch.

Precisely. The "new home sales" sector is not an indicator of the health/performance/trends in the overall housing market. Doesn't factor in existing home, nor condos. Very misleading statistical information. Most home sales are existing, not new.

Existing home sales fell -2.6% in April. Said to be slowest in 4 years. Northeast worst, -8.8%. Weather probably played a part. Median price fell -0.9%, continuing the decline.

Don't forget the record high inventory at 4.2 million homes, an 8.4 month supply. That and steadily rising default levels worries me.

Prices don't really mean a lot to the average RE agent, they just need to SELL! Prices around here have been dropping like a stone. Volume is brisk this spring and all the RE agents are smiling.

The folks who bought at inflated prices with negative amortization short term loans are crying for sure, but the RE agents are happy as they can be.

Wayne:

You really mean that the old "supply/demand" concept really works?

Wow. Imagine that.

Then imagine the impact of sales taxes on vehicle purchases......

Moses....Real estate agents (I was a broker) and mortgage placement companies have no dog in the fight after the sale. And, in many cases, no qualms about selling anything to anyone, regardless of future consequences.

You mean like when the Big 3 did "employee pricing" and broke all sorts of volume records?

About 70% of the houses I am surveying are sitting empty. About 60% of the houses I survey are brand new and never lived in.

One of my builders, who used to start up 30-40 new houses a week, has not started up 40 new houses in 2 years.

I noticed today I hit my 500th job, we are almost mid year, normally I would have bagged 1200-1500 jobs by now, at least 3+ years ago.

I cannot speak for the whole country but I can speak for 3 counties in Florida that I work in and this is what I am seeing.

Like I said before, I can show you many new homes under construction and abandoned.

One of my former employees was laid off from his new job as the developer shut down his entire subdivision project. 3 other huge developments followed his lead.

I have no idea the statistics in Florida but there are too many houses for sale here. Every road I drive down, there are 10+ houses for sale. Everywhere I look there is another house for sale.