The media has taken to the word "slump" to describe the current downturn in the US residential housing market, but even that might be too kind a word for the current state of the market -- there were a few stories out yesterday that suggested the road ahead might move from "slump" to outright "steep decline." The LA Times ran a story that said home sales in Southern California fell to a 12-year low during April:
"Demand is not there and supply is greater; prices are bound to go down," said Esmael Adibi, an economist at Chapman University in Orange. "No question that the bottom of the market hasn't hit yet." Southern California home sales sank to 19,269 in April, a 28.9% drop from the same month last year and a 12% fall from March. The steepest decline was in the Inland Empire. Sales volume dived 45.1% in Riverside County and 46.7% in San Bernardino County.
In spite of the "slump," the reporter on the beat for this story managed to find sellers expecting a quick sale:
In Pasadena, however, Malcolm and Lisa Wright expect a quick sale for their home, which will go on the market in a week or two and be priced in the $600,000 range. Other homes in their neighborhood are drawing multiple bids, and the Wrights see no reason they shouldn't get the same kind of action. "It certainly gives us a bit more confidence that our house will sell," Malcolm Wright said.
The Wrights may actually be indicative of an interesting trend right now -- that homes in the upper echelons are still selling, even if at a declining rate. It just isn't the decline you'd see in more 'blue collar' neighborhoods, which have been hit hard by the contraction in subprime credit. A story in the Washington Post looked at the condo market in the Washington DC area -- and what it found wasn't pretty. (Although I have to wonder how anyone should be surprised that condos are struggling in a down housing market.) In spite of the slump, some industries are thriving -- take auctioneers, for example. They're fighting off business with a stick, with companies like Williams and Williams now issuing press releases almost weekly on BusinessWire as a testament to the company's business propects in the current market. (The content of the W&W press releases, however, are enough to leave you scratching your head: I recall seeing one press release touting a new head of bulk REO purchasing that was previously in sales at TV Guide. How running business dev at TV Guide translates into managing and valuing bulk transactions in real estate, I'll never know.) The Chicago Tribune also recently took a look at auction firms:
With first-quarter downtown condominium sales cut nearly in half from the year-ago period, auctions are a quick way to sell, eliminating months of carrying costs for owners willing to let go of property for well below asking prices. The number of properties sold on the block has doubled from last year for Inland Real Estate Auctions Inc., a member of the Inland Real Estate Group of Cos., based in Oak Brook.