Total home sales were off 1.1 percent in Illinois in December 2005, compared to sales during December 2004. In the Chicago area, sales fell further, 2.7 percent.
Single-family homes sales declined 3.5 percent last year in Massachusetts but from December 2004 to December 2005 sales slipped 8.8 percent.
In California, single-family home sales plummeted 17.6 percent in December, compared to the same month a year ago.
There's more.
New home sales in 2005 dropped 2.4 percent in the Northeast region and 2.9 percent in the Midwest region.
New home construction nationwide in the month of December fell sharply, 8.9 percent, compared to the same month in 2004, and more than double the decline analysts expected and total existing home sales dropped 3.1 percent during December.
The writing is on the wall -- 2006 could be the first year of discontent for once-booming housing industry as housing markets from coast-to-coast begging to show deepening signs of wear.
Ironically, home prices in many regions continue to increase, albeit at a more sustainable moderate pace, even as sales fall.
That could indicate buyers are unable to take advantage of moderating prices because interest rates are rising too fast. While rates are still historically low, they aren't low enough to offset historically high home prices.
"We're beginning to see price declines in most eastern markets in the fourth quarter of 2005," said Foreclosure.com president Alexis McGee.
"The median home price in Boston fell 4.5 percent over the last three months. In Washington D.C., prices were flat over the last 30 days, but down 5.4 percent over the last 90 days. Realtors outside Manhattan in New York City report a shift to a buyer's market," McGee said.
She also said while Miami, FL posted a smaller price decline, the inventory there was up by 39.1 percent over the same time period.
"Other Florida cities are showing similar price profiles, with the biggest inventory buildup on the state's West coast," said McGee. "That build-up will lead to increased time on market and put more downward pressure on prices."
Silicon Valley (Santa Clara County, CA) in Northern California is already showing the signs of a buyer's market -- when homes for sale languish on the market, outnumber buyers and sell for less than the asking price.
Initiated sales or accepted offers on Silicon Valley's single-family, detached homes slipped to 736 in December, the lowest they've been since the number plunged to 620 in December of 2000, according to San Jose based Creekside Realty owner/broker Richard Calhoun's Bay Area Real Estate Market Newsletter.
The problem in areas like Boston and Silicon Valley is that home prices shot up so high, even declining prices aren't attractive especially as interest rates rise.
The median price of single-family homes in closed sales in Silicon Valley slipped back to $734,975 in December, well off the area's record peak price of about $760,000 set earlier in 2005, but the December median remains surreal.
"We are in a buyers' market already and I think it will be that way for a few months with the way interest rates are going," said Mark Hicks, mortgage and real estate broker/owner of the Seabrooke Group in San Jose.
"The people who are buying and selling right now are the short term investors and move-up buyers who basically are using their equity positioning to obtain better housing and to engage in some profit taking," he added.
He also said buyers who've entered the market in recent years have been spoiled by low interest rates. Even after the recent rise in rates, financing costs remain historically low.
"The public needs to realize that they can still obtain some of the lowest rates in history," Hicks said.
Still, as some boom market conditions spread to more affordable markets, other conditions are throwing a wrench in the machinery that should be cranking out a buyers market across a wider swath of the nation.
Foreclosure monitor RealtyTrac said the number of foreclosures nationwide was up 24.5 percent from the first quarter of 2005 to the fourth quarter, indicating the impact of higher home prices and higher mortgage rates.
"Over the past few years, we've seen historically low mortgage rates, consistently escalating home prices and steady, strong employment," said James J. Saccacio, chief executive officer of RealtyTrac.
"This has translated into relatively low levels of foreclosure properties -- particularly bank-owned properties. With interest rates rising and an apparent slowing of property valuations in most markets, we'll be watching closely to see if there's a material effect on the number of foreclosures in 2006," he added.
Hit hard by rising foreclosure rates during 2005 were Massachusetts, up nearly 200 percent; Connecticut, up 188 percent; Michigan up 170 percent; Virginia up 151 percent and Maryland, up 117 percent, and, statistically significant, it's not just the percentages. Numbers are growing too.
Nationwide, the number of foreclosures during the first quarter were 188,122. By the final quarter that number had risen to 234,278. In Massachusetts, the foreclosures jumped from 616 to 1,843; Connecticut, 1,456 to 4,202; Michigan, 4,411 to 11,937; Virginia, 380 to 956 and Maryland, 667 to 1,448.
Washington, D.C.'s foreclosures rose fastest, 300 percent, but the numbers remain relatively low, 10 foreclosures during the first quarter compared to only 155 during the fourth quarter.
Still, for some regions, the trend is obvious.
"Overall, U.S. foreclosure numbers climbed steadily over the course of the year, with more new foreclosures reported in every quarter," said Saccacio. "This trend appears to be moving the real estate foreclosure market back to its historic levels."
Meanwhile, in Massachusetts, public policy reporter, the Pioneer Institute, said municipal regulations, rather than land supply, has put a damper on housing starts, and the short supply has inflated prices in a man-made housing crisis.
Residents are fleeing the surrounding Boston area in droves, according to the institute's "Residential Land-Use Regulation in Eastern Massachusetts: A Study of 187 Communities". The city of Boston was not included in the study.
Massachusetts lost population in each of the past two years, according to the U.S. Census, the only state in the nation to do so.
"In well-functioning markets, when prices rise, supply increases, and then prices stop rising and sometimes even fall," the study reports.
"By this definition, the housing market in the greater Boston area is not working," the study says.
