About a week before Alan Greenspan began talking about froth
in the nation’s housing market, David Lereah, the chief economist for
the National Association of Realtors surprised some of the industry
faithful at their mid-year meeting in May by cautioning that some "Local Housing Bubbles Could Burst in Next Couple of Years." According to an Inman News article by that name, Lereah listed eight "indicators a market may be headed towards a bust":
2. Price growth below historical average,
3. More than a
6.5-month supply of housing,
4. Properties taking longer to sell,
5. Job loss
in the area,
6. Rising mortgage rates,
7. Negative net migration, and
Time to add a 9th indicator to the list: sales of St. Joseph statues are soaring.
"…does St. Joseph know something the rest of us don’t about an
impending pop in the real estate bubble?" an article in the New Jersey-based StarLedger.com asked on Friday, August 19th.
They reported, "Phil Cates, who founded
the Modesto, Calif.-based StJosephStatue.com
in 1996, thinks he might. Cates packages the statues in a kit for
$9.95, and says sales are up 50 percent this year." Closer to home, a
Catholic supply store in Sayville, NY called "Our Daily Bread "has sold
five times as many statues compared to last year."
Silliness and superstition aside, watch for the Mass. Association of
Realtors to announce that sales of single family homes have dropped by
nearly 10 percent in July 2005 compared to the same period last year — the
3rd drop of that magnitude in the past four months. Add that to a
record number of expired listings over the summer (the 10th indicator
of a market heading for a bust and subject of a coming post), and you
can understand why sellers are resorting to superstition to sell
(The Real Estate Cafe first questioned the practice of burying St.
Joseph upside down to expedite real estate sales in an unpublished
letter to Inman News in April 1998 entitled "Doing Justice to the Just Man."
Copies available upon request.)