This from Real Trends: "Cancellations of new home sales are distorting the housing market, making it
appear that things are better than they are, says Mark Zandi, chief economist at
Moody’??s Economy.com. If a contract to buy a home is signed in November, then
cancelled in December, the Census Bureau does not subtract the failed
transaction from the number of sales. In the last year, as the housing market
has cooled, the volume of cancellations has risen to epidemic proportions. New
homes on which contracts are cancelled are not added back into the inventory
figure. The most recent report found that the seasonally adjusted
estimate of new houses for sale at the end of November was 545,000, or 6.3
months of supply. Given the high rate of cancellations, Economy.com says it’s
likely that inventory is substantially higher."
Makes me wonder about all those local newspaper and radio ads by DR Horton these days… are those hundreds of homes closed or hundreds of contracts written? I wonder how many actually fall out?
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3 comments
Diane. I admire you for your willingness to present both the positives and negatives of todays housing market. It is realtors like yourself who bring credibility to the profession. Many in the industry want to hide the glaring weaknesses, or spin them away. I appreciate your straightforward approach, which is why I will continue to visit your blog. Keep up the good work.
I second your sentiments, BB. It would be nice if Zack Hall at the RGJ would start interviewing Diane when he does a story on the Reno market, instead of the industry shills he usually interviews. You know, the ones who are telling us that Bay Area multimillionaires are flocking to Reno, paying $550 a square foot for housing and commenting how dirt cheap Reno is, and how the market is clearly turning and that we will be back to 15% annual appreciation any day now.
Maybe we should all email Mr. Hall at the RGJ business section and link him to Diane’s blog.
Here is a little market update from Mayberry Meadows. Mayberry Meadows is a nice middle class neighborhood, part of Caughlin Ranch, about 20 years old now, located off of Mayberry Drive about a couple hundred yards east of the corner of Mayberry and McCarran.
I have a good friend who sold a house there in June of 2004 for $429,900. At the time, it was the highest price ever paid for a house in Mayberry Meadows. Today, the house located at 3068 Bramble in Mayberry Meadows, which is the exact same model house, is listed for $429,900. (MLS #70001813).
So we are apparently back to summer 2004 prices in this neighborhood. Of course, this house on Bramble will surely sell for less than the asking price, so actually we may be below mid-2004 prices.
The market, slowly but surely, is working its way downward.