I often see the Bubblehead vs HousingHead argument on blogs all over the internet. So why am I posting more info to fuel the debate? Simply because I came across a startling piece of information...
So now, I share! Don't shoot the messenger!!! Please!
Bank of America has recently tallied a detailed Real Estate Survey based upon a nationwide segment of the Real Estate profession. Although their focus seems to remain on new construction and housing starts, I think that there has to be a bit of overtly conservative projections in their figures. You let me know what you think.
B of A asserts the following....
- The Spring selling season ended without ever starting. June survey of real estate agents indicated that housing levels worsened from already weak levels.
- Cutting expectations. BofA now expects a 48% decline in earnings for 2007, and a 72% decline for 2008.
- Leading indicator points to more trouble. An even higher percentage of agents noted that the time needed to sell a home increased in June. This "time to sell" index declined from 14.7 to 16.3 in May and is generally a good leading indicator. BofA thinks this points to further pressure on home prices.
- Prices falling in most markets. BofA's survey pointed to sequentially lower home prices in 30 of 42 markets surveyed. 38% of agents said that home prices fell, 41% said home prices were flat and 21% said that home prices increased. To BofA, this points to sequential deterioration overall.
- Sector View indicated that BofA is cautious on the homebuilders based on the declining traffic trends along with price erosion and higher inventory levels.
Think this is interesting? Check it out!!! It is available by contacting Banc of America Securities out of NY. Or, I can email it to you, since I have not been able to get the ok to post this report in full on my website.
Although, being in the Greater Seattle Area, I think that this survey really seems like they are speaking in a foreign language. I have notices in my small corner of the world that traffic is still brisk. Prices are still on the rise, dispite increased interest rates compared to 12 months ago. I suppose I just have to get outside of my own little world a bit and imagine that this might be more accurate in other markets.
The world is larger than Seattle-Bellevue-Everett-Tacoma, right?
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