by Bill McBride on 7/22/2006 12:17:00 AM
Saturday, July 22, 2006
The WSJ reports: For-Sale Signs Multiply Across U.S. As Supplies Rise and Prices Slip
The housing market continues to weaken in much of the country as inventories of unsold homes rise and many sellers cut their asking prices, a quarterly survey by The Wall Street Journal shows.Prices "edging down" is exactly what I expect - not a "broad collapse of housing prices". I also expect inventories to continue to rise.
There is no sign of a broad collapse of housing prices about a year after the once-hot coastal markets entered a long-anticipated cooling phase. But the general level of prices is edging down in some areas and leveling off in others, while the supply of homes for sale keeps rising.
Source: WSJ Online
"I do think we're going to see some tougher times ahead," says Scott Anderson, senior economist at Wells Fargo & Co. in Minneapolis. By August, he says, most cities in California will be showing modest declines from a year earlier in home prices, and prices also may decline further in parts of Florida, Nevada, Arizona and the Northeast.The language has definitely changed. The chief economist for CAR no longer feels comfortable with the term "soft landing" and now the Wells Fargo senior economist is talking about the market stabilizing in "late 2007".
Headlines about falling prices could make buyers more aggressive in negotiating and persuade some sellers to "get out with what they can," Mr. Anderson says.
Mr. Anderson expects the current downswing to last into next year; by late 2007, he thinks the market will be stabilizing.
Posted by Bill McBride on 7/22/2006 12:17:00 AM