Ok, it looks like we are starting to see the fallout at the high end.  Summit.  $1.5MM.  15 Rooms, 5 Bedrooms, 4 1/2 Baths, 118 x 160 lot with a swimming pool. 

This house is being sold as-is and needs the lenders approval.  Like I tell all of my clients as-is means it.  People usually stop fixing things long before they stop paying their mortgage.

Are you interested in seeing this.  Contact me.

As I drove around this weekend, it seemed there was an open house on every block.  I had the impression that listings must be going through the roof.  It turns out that that there are a lot of new listings but the market is absorbing them at a faster rate than they are coming on. 

 Most counties an towns saw the number of properties on the market about flat but there were some significant reductions in absorption rates, particuarly in Essex County towns and some towns in Morris County.

I think that we have formed a firm bottom and that we are going to see an uptick rather soon.

See the detailed numbers here.

I am going to go out on a limb and predict a surge in housing starts that will last untill June 1st of this year.  Look forward to three months of data that bears this out.  Why will this happen now?  The $8,000 first-time home-buyers credit is a big reason why.

Home-builders have stopped starting new homes since mid October and the levels of inventory is relatively low.  If you sign a contract for a new home today, it will take 6 months for home to be completed and for you to take title.  If you are a first time home-buyer, you must take title by December 1, 2009 or you don’t get the $8,000 tax credit.  A very strong incentive.  That means the house must be complete, the c/o must have been issued by the town, etc.  Work backwards from December 1 and you will realize that you must break ground by June 1st to accomplish this.

I am working with some new home buyers and they are asking contractor to accept a $8,000 penalty for late delivery.  We have not signed anything up like that yet, but it’s coming.

Take a look at all of the homes available as foreclosure and short sales on my website.  Click HERE!

US housing starts in February snapped its streak of declines, increasing optimism in the market. Work began at an annual rate of 583,000 homes, a 22% increase from January.

I have seen an increase in homes on the market over the past few weeks, however, we are seeing the absorption rates declining as more homes are closing.  Many more people are aware of the $8,000 Federal Tax Credit that is available.

I think we are going to see a short term surge in home starts that will continue through the spring.  Any new home buyer needs to close before December 1, 2009 to be eligible for the $8,000 tax credit.  That means there  is a relatively short window if a home is being built to order.  Most home builders have low inventory and are not breaking ground until they have a deposit.  If it takes 6 months from the time you break ground to the move in date, contracts must be signed by June 1.  That leave potential purchasers only 76 days and counting to make up their minds.

 In another positive development, building permits increased 3% in February.  There is a sense, perhaps it is just hope that we have seen the bottom and that we are starting to turn the corner in the housing market.  One robin does not make a spring, so while we start to enjoy the warmer weather, we will be closely watching activity over the next few weeks to see if we are experiencing a true thaw.

 Take a look at the absorption rates.  Click HERE.

U.S. home prices plunged at a record pace in December and consumer confidence hit a new low in February.  The consumer confidence index fell to 25.0 in February, the lowest since the index began in 1967, from 34.7 in January.  Consumers’ outlook showed no sign of turning around, according to the report, boding ill for the consumer spending that drives some two-thirds of the U.S. economy.

Prices of U.S. single-family homes fell 18.5 percent in December from a year earlier, with the pace of decline speeding up, according to the S&P/Case Shiller home price index.  The S&P/Case Shiller composite index of home prices in 20 metropolitan areas fell 2.5 percent after dipping 2.3 percent in November.  However our NY Metro region continues to relatively outperform the nation as a whole with prices only falling 1.7% in December, and year over year prices are down in the NY Metro area 9.2%, less than half of the rate of decline of the nation overall.

Thank heaven for small favors.

For the first time since I have been reporting these numbers, not a single town has a single digit absorption rate.  In Chatham, only 3 homes closed in the last 30 day period with 128 currently on the market.  Not a good sign at all.  However, there are more than a dozen homes under contract, that hopefully will close.

Accross the board, we saw about a 2% increase in listings.  I think that this is a precursor things to come as we get nearer to the spring market.  Sellers are also starting to adjust to lower home values and pricing their homes more realistically.  Buyers however, still think that they can buy homes for 75 or 80 cents on the dollar.  This is not the case any longer as the starting prices are now much lower.

See all of the details at http://fine-home-sales.com/absorption-rates.asp

In an not unexpected report, the Case-Shiller Home Prices Indices showd recorded declines in the prices of single family homes across the US.  This data is for the period ending November 2008, what will be hopefully will be viewed as the darkest period of the financial crisis we are now going through.

The 20-City Composite index shows an annual decline in prices of 18.2%.  From the prior month, the 20-City Composite index was down 2.2%.

Is there any good new here?  If you are buying or selling a home in the New York area the prices are far more stable, along with Dallas, Denver and Charlotte (the best performing cities).

New York area prices declined by 8.6% year over year and by 1.6% from October to November 2008.  New York’s index level is currently the highest at 190.04, indicating that home price are still 90% above their 2000 levels.  While we are still facing declining values in this region, home sales are starting to pick up as reported by the National Association of Realtors last week.

The report also importantly shows that while delinquencies increased, the rate of foreclosures started in both Prime and Sub-Prime loans declined in the third quarter from their second quarter levels.  Also as a measure of consumer confidence, the reported that the number of people with plans to buy a home in the next six months increased in the  third quarter from their second quarter levels.

The strongest towns are South Orange, Madison and Maplewood with absorption rates of 5.9%, 7.3% and 7.5% respectively.  The weakest towns are Union, Chatham and Westfield at 16.6%, 15.4% and 14.1% respectively.

We are still feeling the effects of the last quarter 2008 slowdown in activity as it usually takes a minimum of 30 to 45 days from Contract to Closing.  There are alot of shoppers in the market and I believe we will see some significant drops in these numbers by the end of the 1st quarter ot 2009.

For all of the details and numbers click here.