US housing market lurches lower
Angela Balakrishnan, economics reporter
Wednesday July 25, 2007
Guardian Unlimited
Sales of existing homes in the US plummeted last month to their lowest level for four-and-a-half years, government figures showed today, as analysts warned the "free-fall" in the US housing market is to continue.
The National Association of Realtors said sales in June fell to a lower-than-expected rate of 5.75m units a year, down by 3.8%. This was the lowest level since November 2002.
Wall Street had expected home resales to fall to 5.88m units from the 5.99m initially reported in May before they were downwardly revised.
A breakdown of the data showed that the weakness in the housing market was felt across the whole of the United States.
Boris Schlossberg, strategist at Dailyfx.com, said: "Housing is clearly in free-fall."
"The housing market has experienced a second down leg since the spring," said Richard Dekaser, economist at National City Corp. "The past few months have indicated that a bottom has not been reached, which is negative for the economy."
Analysts also warned that investors should continue to steer clear of residential real-estate related investments.
[A]nalysts said that the slowdown in the US housing market was "turning uglier by the month".
Dimitry Fleming at ING said that seasonally adjusting the prices showed a fall of 1% month on month rather than an increase of 3.2%.
"We see no other option for sales than for them to drop further during the summer," he said.
Leading US mortage lender Countrywide have said it does not expect any improvement for at least a year.
Meanwhile, the benchmark ABX mortgage indexes fell to record lows as the July data showed further deterioration in loans in the sub-prime market.
The article had footer links to earlier housing market reporting, including the doldrums in the mortgage financing sector. Guardian had another item, "Asian boom helps world economy to shrug off US housing market decline."
That is the reality. Roughly two years ago, what was the hype?
Smart Growth Online, A Service of Smarth Growth Network, said:
Smart Growth News
[...]
Ramsey Readies for Twin Cities Growth With 350-Acre Town Center Project
Once mostly rural and recently a fast-growing Twin Cities bedroom community, Ramsey -- about 20 miles north -- is ready for more newcomers with its smart growth vision, embodied in the 350-acre pedestrian-friendly Town Center project under construction, one of the Metropolitan Council's designated ''opportunity sites'' and the winner of the 2005 American Institute of Architects (AIA) Award for Regional and Urban Design.
''About three or four years ago, we knew growth was going to occur, and we started slowly,'' said Mayor Thomas Gamec. ''We thought about what employees we need, what police and fire, of all the services we'd need to handle the growth.''
Consequently, reports Minneapolis Star Tribune writer Jason Amundsen, Ramsey Town Center will be the city's focal point, ''a hub for transit and community life,'' offering perhaps 3,000 varied housing units -- a third of the city stock -- about 400,000 square feet of retail, and a first batch of offices, restaurants and parks.
Town Center will be linked with downtown Minneapolis initially by bus transit and later by the new Northstar commuter rail along the I-10 [sic] corridor. In the construction first-phase, the city will get its new 68,000-square-foot Municipal Center -- with city hall offices, administration and the police department -- and several stores and a restaurant.
The center, said BKV Group architect Ted Redmond, will feature ''a blend of traditional and contemporary components, face the main street and the new South Park, and sit ''on a fabric of green space,'' while internal design flexibility will allow its vertical expansion in the future. -- Star Tribune 9/16/2005
[Italics emphasis added] Here are two October 2006 Town Center views across the street from our miniurban-hub City Hall ediface and ramp, which the "Smart Growthers" touted:
Not much Town Center growth has happened since the October 2006 photographs were taken. Nedegaard was put into bankruptcy by his mortgage lender weeks after the election, and died days after being served the court papers. Foreclosure weeks ago was postponed. The smart growth news folks would have done as well predicting a flat earth, as predicting abundant smart growth. A dumb market apparently intervened. A Forrest Gump market trumped all the hyped smartness.
And if we are to believe the pundits now, we'd better hunker in and wait out the market. Meanwhile, Minnwest sits with a $35 million black eye from the Nedegaard effort failing. How much was bad planning, how much bad market timing, who can say?
But the certainty is the Town Center Task Force and others failed to anticipate anything beyond a perfect market without saturation and without hindrances. They had the idea to market the idea to citizens; and later when the sale of land to the Nedegaard-led Ramsey Town Center LLC was pending and preliminary plat approval was under council consideration there were those expressing worry that the city might not be able to keep up with the breakneck rates of growth some figured would happen.
So, history is history and the adage is learn from it or suffer repeating it. What has Ramsey learned? Where do things go next? If staffing growth was planned based on projections now appearing false; at least keep that in check, while citizens are being taxed to service building debt. If the growth is not happening, don't lay a double whammy on taxpayers.