Existing-home sales plunge to a two-year low | MarketWatch

ECONOMIC REPORT

Existing-home sales plunge to a two-year low
Inventories of unsold homes rise to 13-year high

By Rex Nutting, MarketWatch
Last Update: 10:19 AM ET Aug 23, 2006

WASHINGTON (MarketWatch) -- Sales of existing homes plunged 4.1% to a seasonally adjusted annualized rate of 6.33 million in July, the lowest since January 2004, the National Association of Realtors said Wednesday.

The report shows a continued weakening in the housing market, with inventories up sharply while prices are softening. Sales are down 11.2% in the past year.

"Boom markets are cooling significantly," said David Lereah, chief economist for the realtors group. Sales fell in all four regions.

The housing market and the economy are "fragile," Lereah said. Some markets that never boomed are now weakening because of sluggish local economies, such as Michigan, Ohio and parts of the Northeast, he said.

"It's important for the Fed to understand how fragile the housing market is, and how fragile the economy is," Lereah said. "The economy impacts housing, and housing impacts the economy."
Economists were expecting a decline to 6.56 million, according to a survey conducted by MarketWatch...

New Index Shows Strengthening Demand for Multifamily Rental Apartments Confidence Soaring

Erelease@nahb.com
11:26 am FOR IMMEDIATE RELEASECONTACT: Ann Marie Moriarty(202) 266-8350 amoriarty@nahb.comwww.nahb.org

New Index Shows Strengthening Demand for Multifamily Rental Apartments Confidence

Soaring in Second Quarter 2006 as For-Sale Market Cools

WASHINGTON, Aug. 22--Builder confidence in current rental apartment market conditions climbed to a new high in the second quarter of 2006, and their expectations for the next six months are even higher amid rising occupancy rates, rising rents, and increased traffic at all classes of rental apartments, according to results from the National Association of Home Builders/Fannie Mae Multifamily Rental Market Index* (MRMI), released today.

"We are in the midst of a solid comeback on the rental apartment side of the multifamily housing market," said NAHB Chief Economist David Seiders, who noted that during the last three years, condos have made up a rising share of multifamily housing production."

At the same time, thousands of existing rental units had been converted to for-sale units to meet what seemed an insatiable appetite for condos," said Seiders. "As a result, the supply of rental units is very tight at a time when the demand pendulum is swinging back to rentals," said Seiders.

The component of the MRMI that tracks current demand saw both luxury apartments and lower-priced apartments (Class A and Class C) reaching their highest levels on record in the second quarter of 2006, with luxury rentals reaching 73.2 and lower-priced rentals reaching 68.0, up from 62.5 and 61.5 respectively in the second quarter of 2005. The same demand index for moderately priced (Class B) apartments stood at 71.4, up 6.6 points since the same time last year and the same as in the first quarter of this year. The scale is from 0 to 100, with a rating of 50 generally indicating that the number of positive responses is about the same as the number of negative responses.

Meanwhile, the index tracking market supply conditions moved down slightly for both market rate and affordable apartments. Developers' responses produced a value of 54.1 for market rate rental starts, and 48.9 for affordable (federally subsidized) rental starts.

When asked about their expectations for the rental market over the next six months, multifamily builders were extremely optimistic, with the MRMI reaching 75.9, 78.6, and 74.0 for Class A, Class B, and Class C apartments respectively. Those expectations seemed based on a big boost in the volume of calls from prospective renters--the index tracking this component of demand was up to 70.7 in the second quarter of 2006 from 68.9 in the second quarter of 2005.

In addition, the index that gauges effective rents also reached a record level in the second quarter of 2006, standing at 85.0, which is 15.8 points higher than the same time last year and more than 30 points higher than the same time in 2003.

*Formerly the rental component of NAHB's Multifamily Market Index. In 2002, NAHB created the MMI, a quarterly, nationwide survey of multifamily builders and property owners who are asked a series of questions about current market conditions as well as their expectations for the next six months, tracking builder confidence in both the for-sale condo market and the rental apartment market. To more accurately gauge both segments of the market, NAHB has separated the indexes into versions that will be released separately: The MRMI tracks multifamily rental conditions while the Multifamily Condo Market Index (MCMI) tracks market conditions for condos.

#####
NS2006-148

EDITOR'S NOTE 1: The NAHB/Fannie Mae Multifamily Rental Market Index is strictly the product of NAHB Economics, and is not seen or influenced by Fannie Mae or any outside party prior to being released to the public. MRMI tables can be accessed online at: http://www.nahb.org/. More information regarding housing statistics is also available at www.housingeconomics.com.

EDITOR'S NOTE 2: On Wednesday, August 22, NAHB Chief Economist Dave Seiders, along with senior officers of two large, national multifamily rental and condo development firms, will hold a news teleconference that will update listeners on current apartment and condo market conditions, discuss the future of condo conversions and offer their long- and short-term multifamily forecasts. Members of the media will be given an opportunity to ask questions of all speakers at the conclusion of the call.

To participate, please dial 800-860-2442 (toll free) and ask for the "NAHB Multifamily" call.

For your convenience, presentations and reference materials will be available for download at www.nahb.org/teleconference 10 minutes before the teleconference begins on Wednesday.

ABOUT NAHB: The National Association of Home Builders is a Washington-based trade association representing more than 225,000 members involved in home building, remodeling, multifamily construction, property management, subcontracting, design, housing finance, building product manufacturing and other aspects of residential and light commercial construction. Known as "the voice of the housing industry," NAHB is affiliated with more than 800 state and local home builders associations around the country. NAHB's builder members will construct about 80 percent of the more than 1.84 million new housing units projected for 2005, making housing one of the largest engines of economic growth in the country. www.nahb.org
**************************************************************
1201 15th Street NW, Washington, DC, 20005 **************************************************************

Slim pickings for real estate vultures | CCNMoney

Slim pickings for real estate vultures

There may be a real estate slowdown, but bargain hunters still aren't finding much to feast on.

By Les Christie, CNNMoney.com staff writer
August 7 2006: 3:25 PM EDT

NEW YORK (CNNMoney.com) -- As signs mount of a slowing real estate market, the "vultures" are beginning to circle. But home prices may still have to fall further to create the bargains they crave.

These savvy home buyers who "save their pennies, wait for bargains and then pounce" are already out and about in Manhattan, according to Leonard Steinberg, an executive vice president with Prudential Douglas Elliman.

REJ | Housing Market May Land Harder Than Economists Expect

Housing Market May Land Harder Than Economists Expect

By Mark Whitehouse From The Wall Street Journal Online

Home prices in some parts of the country are falling. Builders are scaling back. Bubble or not, the biggest housing boom in recent U.S. history is coming to an end.

Now here is the big question: How bad will the aftermath be? At this point, most economists expect a "soft landing," a gradual decline that won't derail the nation's economic expansion, now in its fifth year...

REJ | Popularity of 1031 ExchangesSurges With Market Decline

Popularity of 1031 ExchangesSurges With Market Decline

By Tara Siegel Bernard From The Wall Street Journal Online

Investors who want to cash in their chips on real estate bought as an investment -- but defer the tax bill, in some cases forever -- can do so by trading into another piece of property.

This strategy isn't new, but it's enjoying a resurgence in popularity now because many investors believe that real-estate values have peaked in some markets. They want to lock in their gains and shift into other holdings without a big payment to Uncle Sam.

Real Estate Journal | Softer Housing Sector Is Seen,But Data Don't Point to Collapse

Softer Housing Sector Is Seen,But Data Don't Point to Collapse

By Christopher Conkey and Michael Corkery From The Wall Street Journal Online

U.S. home builders stepped up the pace of new construction in May after three months of declines, a sign that the housing market is softening but not collapsing.

The Commerce Department said housing starts rose 5% last month from April to an annual rate of 1.96 million units, but were down 3.8% from a year earlier. Building permits, an indicator of future trends in new residential construction, fell 2.1% last month and were running 8.5% lower than a year earlier.