patrick.net

March 15, 2007

Experts Miffed as Housing Continues to Plunge

San Francisco -- William Wilbur C.R. "Dick" stands in the entry of a prime piece of San Francisco real estate. Dick, a realtor in San Francisco's posh Marina neighborhood, wonders where all the buyers have gone. "Luxury condos like this have been selling here for as long as they've been building them. I don't know where all the buyers are hiding, but the real buying season doesn't start for a couple of months, after kids get out of school."

Dick, like many other realtors in sky-high areas like San Francisco, have already endured nearly a year of anemic sales, stubborn sellers, and the largest culling of their profession on record. "Prices always go up here, that's historical fact. We were up about 5-6% last year, in fact", reassures Dick.

But the fear is palpable. In fact, buyers have not returned, and prices are down nationally. San Francisco has seen modest home price drops, compared to some other areas, posting a respectable 8% drop in 2006. Southern Florida has not been so lucky. Plagued by rampant overbuilding, speculative fervor, and an anemic local economy, Southern Florida communities have seen over 20% price drops, with no sign of relief in 2007.

In fact, many areas in which home builders targeted for massive new construction activity are now seeing double-digit price drops, mostly attributable to a nearly 2 year backlog of unsold new homes. "Home builders are much more willing than individual home owners to drop prices. I think we've seen capitulation among home builders; they've exhausted all other incentive options, and now they're left with price." Mr. Iwasright is one of the short list of economists who predicted that the US housing slowdown would be far worse than either markets or the media expected. "I've appeared on television numerous times, but only recently have people begun to listen. I'm afraid it's probably too late now."

Back in San Francisco, Dick loads some boxes into the trunk of his standard issue Lexus. "Sellers are starting to price to sell. I'm seeing a few listings reduce prices by a couple thousand dollars, but those are usually in less desirable parts of the city. But this area is unique; here, we're protected from the kind of drops they're seeing in Las Vegas and San Diego. Here, it always goes up. In fact, look at this condo, which went almost a quarter million over asking just a couple months ago!" As Dick drives off down the street, he passes through a virtual sea of "For Sale" signs."

Randy H appears every fortnight in this publication.

**Disclaimer: What appears here are fictional works; any similarities to names or places are coincidence. Any offense taken by those who would be offended is well deserved.

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