Home Sales Down on Island Year-Over-Year

In a Message from the President posted by Staten Island Board of Realtors (SIBOR) President Dawn Carpenter to the SIBOR Realtor Website:

"Year to year comparisons reveal that we are down between 27 and 33% from this time a year ago in units sold. Prices have also begun to recede more rapidly in 2008. Some continue to call this a housing bubble burst. We believe that the more realistic interpretation is that we are undergoing a credit bubble burst."

She goes on to explain:

"The difference being that in a housing burst supply would exceed demand typically resulting in lower sales followed by falling prices. This is usually precipitated by rising interest rates and/or rising unemployment. In this credit burst there is still significant demand (although there are signs of employment issues to come), along with supply, but the ability to fund purchases has been curtailed due to the tightened mortgage market."

The message, published in mid-june but not dated, goes on to explain how local realtors can better themselves while continuing to give great service.

Not mentioned are other local pressures, such as that foreclosures are up on Staten Island from 34 in Q1 2007 to 174 in Q1 2008, per an article in the Post published June 12th, after recording a record increase in foreclosures late last year as well. this will also wind up contributing to the supply of houses on market, as well as price pressures as banks look to unload these homes as the hottest part of the summer selling season begins to wind down.

The lack of ready credit for buyers on the island may be due in part to the somewhat un-remarkable drop in prices. Year over Year prices in the region are down 7.4%, according to the Case-Shiller Price Index, after posting a record run of increases to the tune of 130+% over the last 10 years.

It is possible the banks believe that prices will need to decline further here to come more in line with the purchasing power of the population, especially as the days of the 100% mortgage and the no-doc loans fade further in the rearview mirror.

Message To President: http://sibor.frogpond.com/DispArticle.cfm?ARTICLE_ID=23201