by Calculated Risk on 11/17/2005 10:15:00 PM

The SF Chronicle on the DataQuick report: Gaming the housing peak

A few added quotes:

"I don't get the feeling that prices have declined," [a potential buyer] said. "Homeowners are seeking prices that are in line with comps (comparable listings) of homes that sold a few months ago.''

John Karevoll, an analyst with DataQuick, said that is exactly what happens at the end of a real estate cycle. "We always see people trying to game the peak -- trying to get the most for their properties,'' he said.

According to Karevoll, this doesn't indicate a housing bubble about to burst but rather the end of a cycle in which sales will drop off and prices will reach a plateau.

In effect, the market had been robust because house seekers who would have waited to buy purchased this year instead because of low interest rates. "We were stealing (housing activity) from the future,'' he said.

Karevoll now expects a long lull in the market as it stabilizes.

Tapan Munroe, an economist and director for LECG, a worldwide consulting firm, agreed. "Sales are flattening, and prices are also going down a bit, but I doubt very much it is a bursting of a bubble. It's more like a slowdown and a soft landing.''

But Munroe said the situation could change if interest rates were to reach 7 to 8 percent. "That would certainly create a significant slowdown.''