A Sign of the Times

The Sacramento Bee reports 'For Sale' signs mushroom, stay up longer.

• Jim Eggleston, owner of Sacramento's biggest residential "For Sale" sign installer, predicts this will be his busiest week in 21 years in business. He's had to hire an extra worker and buy a new delivery truck since his crew planted a one-day record of 225 signs on Monday.
• "There are whole lot of houses going up for sale," says Eggleston, who promises next-day installation when a real estate broker orders a new sign. "The number of 'For Sale' signs we're removing keeps going down relative to the number we're putting up."
• "The inventory is ramping up and we're now seeing a changing market - the bell has tolled," said Michael Lyon, head of TrendGraphix and Lyon Real Estate.
• Reductions in asking prices are now rampant: In May there were 2,318 price reductions in the four-county region; in July there were 4,100 and this month is on pace to see about 4,500, TrendGraphix reports.
• The local Building Industry Association reports that in July the number of people shopping in new home subdivisions in the capital region fell to 32,679 - down 25 percent from a year ago and the lowest for July since 1999. Some in the industry have argued that shoppers of both new and resale homes were scarce last month because of the extreme heat.
• "We're starting to get a slew of invitations from builders ... where they're holding their models open to brokers before they're open to the public," said agent Britt Wiseman of Coldwell Banker's Sierra Oaks office. "That's a dramatic change."
• "You look at home prices, at the kind of mortgage payments they require and at income levels that haven't risen all that dramatically and something is a little out of whack," says Brad Williams, chief economist for the state Legislative Analyst's Office, which prepares economic forecasts for the Legislature. "It wouldn't surprise me if you hit a sort of price ceiling and see a downward adjustment in prices."

According to the Bee, Brad Williams chief economist for the state Legislative Analyst's Office "doesn't foresee a housing collapse" even though he admits "something is a little out of wack".

A little out of whack asks Mish? That's kind of like saying the ocean was a little out of whack in that devastating tsunami that wrecked Southeast Asia last December. By the way, no one saw that tsunami coming either even though geographic reports picked up the earthquake that triggered it long before the waves crashed to shore. In this case, the signs should be readily apparent to everyone. Unfortunately, no one wants to believe them.

Mike Shedlock / Mish
http://globaleconomicanalysis.blogspot.com/