Wednesday, November 02, 2005

USA Today: Overheated housing market is cooling off

by Bill McBride on 11/02/2005 12:37:00 AM

The USA Today reports: Overheated housing market is cooling off

...there's nervous chatter about the recent increase in the number of homes for sale, sellers cutting their asking prices and builders wooing buyers with incentives.

The reason: There are signs that the overheated market might finally be cooling. The Commerce Department, for example, said sales of new homes in September fell shy of expectations, median prices declined 5.7%, and the number of new homes for sale shot up to a record 493,000. Freddie Mac also said October mortgage applications seem to be "tapering off."
The USA Today article covers familiar ground and adds these anecdotes:

• Ricardo Cortazar, a Realtor in Tempe, Ariz., says it now takes 35 days, on average, to sell a home. Six months ago, it took a week. Inventory in Arizona has swelled to 15,000 homes, vs. 6,000 in May.

• Vaughn Bryan, a real estate agent in San Bernardino County, has spotted another ominous trend: a rise in the number of 90-day listing contracts that expire without a sale.

• Dan Elsea, a Detroit Realtor, says it's common for sellers in the job-starved Motor City to reduce asking prices two, three or four times before signing a deal.

• Kelly Haslam of Madison, Wis., hasn't been able to sell her bungalow-style home despite putting it up for sale "by owner" seven weeks ago, hosting four open houses and dropping her price once.

• Judi Keenholtz, CEO of Empire Realty, which serves San Francisco's East Bay, says desirable homes in good school districts that used to fetch eight to 10 bids now get three or four.
The housing market does appear to be slowing.