How's your housing market? (3 Viewers)

[tommyGunZ]

I put my house on the market Saturday and had 4 people look at it last night and 3 coming tonight. First offer is supposed to be faxed over later today according to the RA. FWIW, I'm selling it myself but paid to have it listed on the MLS

any worry that you underpriced it?

 

[tommyGunZ]

Home-price forecast: First ever decline

National Association of Realtors cuts 2007 forecast; would mark first drop since it began tracking values in 1968.

NEW YORK (CNNMoney.com) -- Home prices are expected to finish down for the year, the National Association of Realtors (NAR) said Tuesday, which would mark the first drop since the group started tracking values in 1968.

NAR projects a 1 percent decline in the median price of an existing single-family home, to $219,800. The group, in a forecast made a month ago, had previously been expecting a 0.7 percent decline. Prior to that, it had expected a gain of 1.2 percent.

The number of home sales is also expected to dip from 6.48 million in 2006 to 6.29 million in 2007, a drop of 2.7 percent.

Prices of new homes, at a median of $246,400, are expected to remain steady.

According to Lawrence Yun, a senior economist for NAR, speculative investing in real estate, which contributed to abnormal price growth for several years, has all but disappeared in the present market.

"Home buyers today are purchasing for the long-term, generally with a realistic expectation of modest gains over time," Yun said.

NAR is predicting that sales will recover gradually over the second half of the year and prices will begin to edge up again sometime after that. In 2008, NAR is forecasting price gains of 1.4 percent for existing homes and 2.2 percent for new homes.

According to Walter Molony, a spokesman for NAR, the statistics may exaggerate the drop because sales have slowed more in high-priced areas than in moderately-priced ones.

Homes from the fastest - and slowest - growing markets

Also affecting home prices is a crisis in the subprime lending industry. A rash of foreclosures and forced sales that will add to already lengthening inventories is expected to hurt housing markets throughout the year.

Loan originators are tightening up lending standards this year in response to increasing defaults among subprime borrowers.

That will make it more difficult for many credit-damaged house hunters to obtain financing, subtracting demand from already weakening housing markets.

NAR expects interest rates, currently at about 6.16 percent for a 30-year fixed-rate loan, to rise gradually to about 6.5 percent by the fourth quarter, which should also have a dampening impact on home prices.

So the NAR has gone from a projected gain of 1.2% to now a projected decline of 1% in the matter of a couple months? Anyone care to wager that the decline is > 1%?About time for the bottom calling to start. I mean, an unprecedented 10 yr. run followed by a 1 yr decrease has to be the bottom, right?

 

[Gambino]

I put my house on the market Saturday and had 4 people look at it last night and 3 coming tonight. First offer is supposed to be faxed over later today according to the RA. FWIW, I'm selling it myself but paid to have it listed on the MLS

any worry that you underpriced it?

Lol, my wife asked the exact same question. No it is priced fairly and most importantly IMO it is a home that is in great shape and "move in ready". I shelled out $15k or so to make sure that a buyer could just move their stuff in. Of course, I marked it up $25k for my trouble . If I get my asking price minus 3% for the agent I'm protecting, I'll gladly move on and cash my chips in. Based on people I talk to in Atlanta, nice houses under $750k or so that are well maintained and don't require buyer work are selling just fine.

 

[tommyGunZ]

I put my house on the market Saturday and had 4 people look at it last night and 3 coming tonight. First offer is supposed to be faxed over later today according to the RA. FWIW, I'm selling it myself but paid to have it listed on the MLS

any worry that you underpriced it?

Lol, my wife asked the exact same question. No it is priced fairly and most importantly IMO it is a home that is in great shape and "move in ready". I shelled out $15k or so to make sure that a buyer could just move their stuff in. Of course, I marked it up $25k for my trouble . If I get my asking price minus 3% for the agent I'm protecting, I'll gladly move on and cash my chips in. Based on people I talk to in Atlanta, nice houses under $750k or so that are well maintained and don't require buyer work are selling just fine.

nice work. you already have your new spot lined up?

 

[Gambino]

I put my house on the market Saturday and had 4 people look at it last night and 3 coming tonight. First offer is supposed to be faxed over later today according to the RA. FWIW, I'm selling it myself but paid to have it listed on the MLS

any worry that you underpriced it?

Lol, my wife asked the exact same question. No it is priced fairly and most importantly IMO it is a home that is in great shape and "move in ready". I shelled out $15k or so to make sure that a buyer could just move their stuff in. Of course, I marked it up $25k for my trouble . If I get my asking price minus 3% for the agent I'm protecting, I'll gladly move on and cash my chips in. Based on people I talk to in Atlanta, nice houses under $750k or so that are well maintained and don't require buyer work are selling just fine.

nice work. you already have your new spot lined up?

In negotiaons with my wife. She has her eye on our 15-20 year home, while I want to buy another intermediate step home that we can put some money into and make more $. We'll see.

 

[tommyGunZ]

Will let you know how my home sells - going on the market in a couple weeks. I'm right next to a Jr. High and an elementary school, and have already made contacts at the PTA as well as I'm going to send out a few hundred fliers to the neighbors. I'll try to fsbo it for a week or so (which also gets realtors calling me, which is awesome - they call me soliciting me, they get the sidestep and reverse solicitation) and if I can't do that quickly I'll list it.

GL ninja. You already have a new place picked out/purchased?

 

[tommyGunZ]

San Diego foreclosures hit 25-year high

The Associated Press

Last Updated: May 8, 2007, 10:00:36 AM PDT

SAN DIEGO (AP) - Home foreclosures in San Diego County hit a 25-year high in April, public records show.

Transfers of mortgage notes from owners to lenders jumped to 604 in April, up 20 percent from 509 properties in March. The previous record of 589 foreclosures in a single month was set in July 1996, according to The (San Diego) Daily Transcript, which began compiling foreclosure data in 1982.

Notices of default, the first stage in the foreclosure process, declined slightly in April to 1,499 compared to 1,517 in March.

"This might be just the beginning," said Nathan Moeder, principal at San Diego-based London Group Realty Advisors Inc. "Right now it's subprime mortgages, but down the road it might be from the middle-class, people who lease two or three cars and are putting their kids through college."

Moeder said he has not seen evidence that the trend is putting downward pressure on home prices.

"The only impact it has on the marketplace is on buyer psychology," he said.

For a point of reference, there were 25 foreclosures in San Diego County in April 2005.

 

[tommyGunZ]

Realtor Bob Casagrand on San Diego:

March 2007: 1st Quarter 2007: San Diego Housing Market - single family attached and detached homes: Sales for the month of March were 2,361 down 24% from March 06 and down 39% from March 05. Pending sales in March of 2,769 indicate that April sales will be around 2,500 continuing this period of sluggish sales. Sales for the quarter were 6,189 down almost 15% from last year and down 30% from the same period in 2005. If trends hold, the first quarter sales indicate that sales for the year could end up well below the 30,000 mark. There are market issues that make predicting risky. The lack of availability of sub-prime loans will knock a substantial number of buyers out of the market, the increasing number of foreclosures putting more homes on an already crowded market and the continued outward migration of people from San Diego will have the effect of suppressing sales and increasing inventory. The need to sell is also increasing, we have seen more short sales close escrow so far this year than in all of last year and about 8% of our current inventory is listed as short sales. All of this put together will put serious downward pressure on prices.

While the smaller sized home sales dropped 30% and prices dropped about 10% the high end of the market (over 3000 sq ft) remains strong with no decrease in sales and prices remaining flat with last year. The average price for March came out at $636,000 up 2.6% from last year. However, adjusting for the change in sales mix to an increase in larger homes the average price actually declined about 7% from last year. The over 3000 sq ft homes represented 24% more of the sales mix in March and the under 1000 sq ft homes were 8% less of the sales mix having a major impact on the average price calculation. The change in price depends on the home you live in, price declines ranged from 2.5% to 10% depending on the size home with over 3,000 sq ft remaining flat.

Inventory ended the month at 18,373 over 7 months supply. This is an increase of 15% from last year at this time. Expired, cancelled and withdrawn listing so far this year number 10,603 versus 4,618 last year, a 230% increase. This is a good indicator of the difficulty people are having selling their homes. Listings for the quarter were 20356 down about 3% from last year. With sales down 15% this is resulting in growing inventory.

With declining demand, increasing inventory, increased foreclosure rates/short sales and continued population outward migration the balance of this year will see serious downward pressure on prices and the further the drop in demand the more the pressure will intensify.

Why didn't I buy a year or two ago. I'm missing out on all of that negative equity.

 

[John Mamula]

Realtor Bob Casagrand on San Diego:

March 2007: 1st Quarter 2007: San Diego Housing Market - single family attached and detached homes: Sales for the month of March were 2,361 down 24% from March 06 and down 39% from March 05. Pending sales in March of 2,769 indicate that April sales will be around 2,500 continuing this period of sluggish sales. Sales for the quarter were 6,189 down almost 15% from last year and down 30% from the same period in 2005. If trends hold, the first quarter sales indicate that sales for the year could end up well below the 30,000 mark. There are market issues that make predicting risky. The lack of availability of sub-prime loans will knock a substantial number of buyers out of the market, the increasing number of foreclosures putting more homes on an already crowded market and the continued outward migration of people from San Diego will have the effect of suppressing sales and increasing inventory. The need to sell is also increasing, we have seen more short sales close escrow so far this year than in all of last year and about 8% of our current inventory is listed as short sales. All of this put together will put serious downward pressure on prices.

While the smaller sized home sales dropped 30% and prices dropped about 10% the high end of the market (over 3000 sq ft) remains strong with no decrease in sales and prices remaining flat with last year. The average price for March came out at $636,000 up 2.6% from last year. However, adjusting for the change in sales mix to an increase in larger homes the average price actually declined about 7% from last year. The over 3000 sq ft homes represented 24% more of the sales mix in March and the under 1000 sq ft homes were 8% less of the sales mix having a major impact on the average price calculation. The change in price depends on the home you live in, price declines ranged from 2.5% to 10% depending on the size home with over 3,000 sq ft remaining flat.

Inventory ended the month at 18,373 over 7 months supply. This is an increase of 15% from last year at this time. Expired, cancelled and withdrawn listing so far this year number 10,603 versus 4,618 last year, a 230% increase. This is a good indicator of the difficulty people are having selling their homes. Listings for the quarter were 20356 down about 3% from last year. With sales down 15% this is resulting in growing inventory.

With declining demand, increasing inventory, increased foreclosure rates/short sales and continued population outward migration the balance of this year will see serious downward pressure on prices and the further the drop in demand the more the pressure will intensify.

Why didn't I buy a year or two ago. I'm missing out on all of that negative equity.

your excessive short term view of the r/e market is what gets you into trouble in these threads.

 

[tommyGunZ]

Why didn't I buy a year or two ago. I'm missing out on all of that negative equity.

your excessive short term view of the r/e market is what gets you into trouble in these threads.

How so?How would you describe your posts/outlooks in these threads?

 

[John Mamula]

Why didn't I buy a year or two ago. I'm missing out on all of that negative equity.

your excessive short term view of the r/e market is what gets you into trouble in these threads.

How so?How would you describe your posts/outlooks in these threads?

longterm. that home bought two years ago will be worth 50%+ in 10 years.my view has also been one of a very localized approach. there are still extremely positive fundamentals in AZ. there is an oversupply of resale units that was exacerbated by the sub prime issue, but that is a temporary phenomenon. builders are doing the right thing in shutting the spigot of new inventory coming onto the market via permits and letting the existing inventory burn off. with as "bad" as the market has been in AZ median and average prices are stable or slightly down, not the 30% crash so many make it out to be.i am seeing homes selling well for under $200k and for over $400k with a no man's land in the middle due to numerous factors. sellers are slowly coming to grips with the market, but honestly many aren't there yet. until they get their homes prices appropriately, that is going to hold up the recovery.but for someone who prices it right and has a good home, homes will go in under a month. 2 of my friends sold their homes in under a month. why? because they aren't deluded and understand the market dynamics.AZ will be fine, although many of our builders are on very shaky ground and with one already going bk i expect a couple more to in the next 3 months. but then again, they got greedy and didn't lower prices until it was too late. i expect this is the same greed phenomenon that is crippling people going into foreclosure.you act like people who bought 2 years ago will never make any money. if they stay in their place for 10 years they'll be very happy with their purchase.

 

[TommyGilmore]

you act like people who bought 2 years ago will never make any money. if they stay in their place for 10 years they'll be very happy with their purchase.

But not as happy as the people who buy this year and stay for 8 years.

 

[LHUCKS]

you act like people who bought 2 years ago will never make any money. if they stay in their place for 10 years they'll be very happy with their purchase.

I bough 9 months ago in AZ when the market bottomed and have made 9% on my place based on sales over the last two months. Prices have been stable after the initial drop.Prices don't collapse until the job market collapses...I don't know how many times I have to state this in this thread.

 

[tommyGunZ]

Why didn't I buy a year or two ago. I'm missing out on all of that negative equity.

your excessive short term view of the r/e market is what gets you into trouble in these threads.

How so?How would you describe your posts/outlooks in these threads?

longterm. that home bought two years ago will be worth 50%+ in 10 years.my view has also been one of a very localized approach. there are still extremely positive fundamentals in AZ. there is an oversupply of resale units that was exacerbated by the sub prime issue, but that is a temporary phenomenon. builders are doing the right thing in shutting the spigot of new inventory coming onto the market via permits and letting the existing inventory burn off.

with as "bad" as the market has been in AZ median and average prices are stable or slightly down, not the 30% crash so many make it out to be.

i am seeing homes selling well for under $200k and for over $400k with a no man's land in the middle due to numerous factors. sellers are slowly coming to grips with the market, but honestly many aren't there yet. until they get their homes prices appropriately, that is going to hold up the recovery.

but for someone who prices it right and has a good home, homes will go in under a month. 2 of my friends sold their homes in under a month. why? because they aren't deluded and understand the market dynamics.

AZ will be fine, although many of our builders are on very shaky ground and with one already going bk i expect a couple more to in the next 3 months. but then again, they got greedy and didn't lower prices until it was too late. i expect this is the same greed phenomenon that is crippling people going into foreclosure.



you act like people who bought 2 years ago will never make any money. if they stay in their place for 10 years they'll be very happy with their purchase.

With regard to the bold:First sentence: I have absolutely never taken that position. I am well aware of the fact that 10-20 years from now home prices will likely be higher than they are today.

Second sentence: I completely disagree. If there are significantly cheaper entry points into the market over the next year or two (which is my position), those who bought in '05 would be stupid to "be happy" with their purchases even if their home price is higher in 2015 than when they bought in '05. Why would anyone "be happy" with equity gains that could have been substantially greater had they foreseen the market correction and waited an extra couple years to purchase significantly more home for less money?

In sum: my analysis and real estate following is STRICTLY about my entry point into the market.

Buyer A: purchases long term home for 500k in '05. Home is worth 700k in 2015.

Buyer B: purchases long term home for 350k in '08. Home is worth 700k in 2015.

I want to be Buyer B.

 

[tommyGunZ]

you act like people who bought 2 years ago will never make any money. if they stay in their place for 10 years they'll be very happy with their purchase.

I bough 9 months ago in AZ when the market bottomed and have made 9% on my place based on sales over the last two months. Prices have been stable after the initial drop.Prices don't collapse until the job market collapses...I don't know how many times I have to state this in this thread.

there are 60K homes on the market in Maricopa County. I'm glad your investment appears to be a wise one but you're sadly mistaken if you think your market has sniffed the bottom.

 

[Gambino]

you act like people who bought 2 years ago will never make any money. if they stay in their place for 10 years they'll be very happy with their purchase.

I bough 9 months ago in AZ when the market bottomed and have made 9% on my place based on sales over the last two months. Prices have been stable after the initial drop.Prices don't collapse until the job market collapses...I don't know how many times I have to state this in this thread.

Lol at 'bottomed", you have no idea where the bottom is. And you also haven't "made 9%" or anything else until you sell. What an effin know it all you are.

 

[Sonny Lubick Blowup Doll]

In your example, GunZ, you shouldn't have used a 30% drop, or ideal situation. But yeah, I agree with the rest.

 

[tommyGunZ]

In your example, GunZ, you shouldn't have used a 30% drop, or ideal situation. But yeah, I agree with the rest.

You're right. Just felt I had to give an obvious example to illustrate my position since my short term "wait, there will be big bargains soon" position has been mischaracterized as "people will never make money ever again".

 

[LHUCKS]

Lol at 'bottomed", you have no idea where the bottom is.

My bottomed remark was based on what has happened in the past and not what may or may not happen in the future.

 

[KGB]

you act like people who bought 2 years ago will never make any money. if they stay in their place for 10 years they'll be very happy with their purchase.

I bough 9 months ago in AZ when the market bottomed and have made 9% on my place based on sales over the last two months. Prices have been stable after the initial drop.Prices don't collapse until the job market collapses...I don't know how many times I have to state this in this thread.

there are 60K homes on the market in Maricopa County. I'm glad your investment appears to be a wise one but you're sadly mistaken if you think your market has sniffed the bottom.

 

[tommyGunZ]

you act like people who bought 2 years ago will never make any money. if they stay in their place for 10 years they'll be very happy with their purchase.

I bough 9 months ago in AZ when the market bottomed and have made 9% on my place based on sales over the last two months. Prices have been stable after the initial drop.Prices don't collapse until the job market collapses...I don't know how many times I have to state this in this thread.

there are 60K homes on the market in Maricopa County. I'm glad your investment appears to be a wise one but you're sadly mistaken if you think your market has sniffed the bottom.

read it on an inventory tracking website, though now that I think of it I think it also included Pinal County.

 

[John Mamula]

you act like people who bought 2 years ago will never make any money. if they stay in their place for 10 years they'll be very happy with their purchase.

I bough 9 months ago in AZ when the market bottomed and have made 9% on my place based on sales over the last two months. Prices have been stable after the initial drop.Prices don't collapse until the job market collapses...I don't know how many times I have to state this in this thread.

there are 60K homes on the market in Maricopa County. I'm glad your investment appears to be a wise one but you're sadly mistaken if you think your market has sniffed the bottom.

it depends on what you call on the market.there are 52k homes active.

another 1k homes in the contingency stage.

there's another 6.5k pending

there's your 60k.

i personally think a better barometer is active homes, but as long as everyone is using apples to apples its fine. the problem is that different people define it different ways so people think it is worse/better than it is based on mis information.

 

[tommyGunZ]

you act like people who bought 2 years ago will never make any money. if they stay in their place for 10 years they'll be very happy with their purchase.

I bough 9 months ago in AZ when the market bottomed and have made 9% on my place based on sales over the last two months. Prices have been stable after the initial drop.Prices don't collapse until the job market collapses...I don't know how many times I have to state this in this thread.

there are 60K homes on the market in Maricopa County. I'm glad your investment appears to be a wise one but you're sadly mistaken if you think your market has sniffed the bottom.

it depends on what you call on the market.there are 52k homes active.

another 1k homes in the contingency stage.

there's another 6.5k pending

there's your 60k.

i personally think a better barometer is active homes, but as long as everyone is using apples to apples its fine. the problem is that different people define it different ways so people think it is worse/better than it is based on mis information.

I agree with bagger here. the 60k number I saw wasn't broken down in this manner. 52k active homes is what I'd consider the inventory.

 

[avoiding injuries]

Well, I'm going to take a great interest in this thread over the next few months.

I just bought a new construction home that, if on time, will be ready to close on in January. That gives me 8 months to sell my home, but for the time being I am counting on getting a certain amount for my current place for the remainder of the down payment on the new one.

 

[RoarinSonoran]

i am seeing homes selling well for under $200k and for over $400k with a no man's land in the middle due to numerous factors.

So...someone in that "no-man's land" may as well just round up to $400k?? Cool!

 

[BassNBrew]

you act like people who bought 2 years ago will never make any money. if they stay in their place for 10 years they'll be very happy with their purchase.

I bough 9 months ago in AZ when the market bottomed and have made 9% on my place based on sales over the last two months. Prices have been stable after the initial drop.Prices don't collapse until the job market collapses...I don't know how many times I have to state this in this thread.

Ah...buying opportunity in 09.

 

[John Mamula]

i am seeing homes selling well for under $200k and for over $400k with a no man's land in the middle due to numerous factors.

So...someone in that "no-man's land" may as well just round up to $400k?? Cool!

 

[BassNBrew]

http://finance.yahoo.com/retirement/articl...ces-Are-Hot-Now

Despite a National Downturn, Some Markets That Missed the The Housing Boom Are Thriving; Fleeing Florida for Charlotte

The housing news isn't all grim. Even as prices sag nationwide, there are several cities in the country where home values are climbing smartly.

Portland, Ore., Boise, Idaho, Seattle, Salt Lake City, Houston, Austin, and Charlotte and Raleigh, N.C., are among the cities bucking the national trend. Homes' appreciation there between the fourth quarters of 2005 and 2006 far exceeded the national average of 5.9%, according to the Office of Federal Housing Enterprise Oversight. In some markets, like Boise and Seattle, the appreciation jumped well into the double digits.

Local

"All real estate is local, despite the headlines," says Lawrence Yun, the senior economist for the National Association of Realtors. Nationwide, the median existing-home price fell 1.3%, to $212,800 in February from $215,700 in February 2006, according to preliminary NAR statistics.

There's no single secret of these cities' apparent success, but many of them missed the housing boom of the past five years. From 2001 to 2005, annual appreciation in these cities was between 2% and 5%, far slower than the 7% to 12% national average, according to the Office of Federal Housing Enterprise Oversight. (OFHEO calculates appreciation based on repeat sales or refinancings of the same single-family properties.) Now, prices are playing catch-up.

Industry and Education

Most of the cities also have one or more strong industries to drive their economies -- colleges and technology in Raleigh, banks in Charlotte, energy in Houston and aerospace in Seattle. And all have education levels above the national average.

These cities emerged from the last recession later than most of the country for various reasons, including the lagging technology, aviation and energy industries, says Mark Zandi, CEO of Moody's Economy.com. Now, their economies are strong and housing prices are still perceived as affordable, luring buyers into the market. For instance, the median sales price for a single-family home in the area of Austin-Round Rock, Texas, is $173,700, according to the National Association of Realtors, compared with $371,200 in the Miami-Fort Lauderdale-Miami Beach area.

So many Northeasterners who moved to Florida have resettled in the Charlotte area in recent years -- both workers and retirees -- that Henry Scala and others in Charlotte refer to them as "halfbacks."

The influx may have helped Mr. Scala when he moved across town in January. "I was faced with selling this house in theoretically a down market," the 36-year resident of Charlotte says. "But there was no down market in Charlotte." Charlotte-area house prices grew 9.09% from the fourth quarter of 2005 to the fourth quarter of 2006 -- the fastest appreciation the metro area has seen since 1982, according to OFHEO. Mr. Scala got his $800,000 asking price in four days.

Today's declining prices nationwide are in part the result of an earlier explosion of short-term investors in Florida, California and other booming markets. Recently, both investors and long-term homeowners have been cashing in or cutting losses in formerly hot markets and settling in areas that avoided the boom, such as the Carolinas, parts of Georgia and Tennessee, areas of Texas, the Western mountain states and the Pacific Northwest.

"We're cutting and running," jokes Mark Hoover, 47 years old. Mr. Hoover and his wife, Melissa, 35, are both in the mortgage business, and they are moving from Florida to Austin to work for PRO-30, a mortgage lender based in Novato, Calif. But the Hoovers' move hasn't been easy. Their vacation home in Wellington, Fla., near West Palm Beach, has been on the market since October with a price tag of about $900,000, and their $1 million-to-$1.5 million primary home outside Fort Lauderdale, Fla., has sat since February.

From Portland to Austin

Now, the Hoovers are ready for stable, low-cost, "homey" Austin, where houses appreciated at a steady 6.7% annual rate between the fourth quarters of 2004 and 2005, even as Fort Lauderdale's prices skyrocketed more than 30% before dropping off recently. The Hoovers recently paid about $400,000 for a home on five acres outside Austin and have plans to move in the next two months.

The growth of Portland, Salt Lake City, Boise and Seattle can be attributed in part to an influx of former Californians and people opting out of slumping Las Vegas or Phoenix. The trend may have created smaller echo booms -- especially in Boise and Salt Lake City -- which have slowed in the past several months, with each city experiencing a slow winter. Other areas, too, have experienced faster-than-average appreciation, including the New York City borough of Manhattan and New Orleans.

While some worry that a new group of cities could face a boom-and-bust cycle, local real-estate agents and economists predict stable growth for the near future. Since the cities have strong economies and builders, lenders and investors are increasingly cautious, homes are less likely to become extremely overvalued than in booming markets in the first half of the decade.

Mr. Yun of the National Association of Realtors predicts prices nationally will bottom out sometime this summer. Mr. Zandi, of Moody's Economy.com, isn't so sanguine. "I'd be shocked if [prices stop depreciating] this summer; it's more likely next summer," he says.

Laura Chung, an interior decorator who recently moved to Portland, Ore., from Cambridge, Mass., sees the strong market as the ultimate stress reliever. Mrs. Chung, and her husband, Eric, are considering sprucing up their new home and selling it if they find a house more to their liking -- a prospect that wasn't so simple back in Cambridge. "It's not this perpetual worry that we're not going to sell" the 2,500-square-foot house, she says. While Mrs. Chung's move to Portland had nothing to do with the housing prices, they "definitely ease the wallet a little."

After sitting on the market from June to December 2006, the Chungs' 1,200-square-foot Cambridge, Mass. townhouse condominium sold for $70,000 less than the asking price. "The number of condos in our price point was at some record high," Mrs. Chung says.

To attract a buyer, their real-estate agent suggested purchasing a flat-screen TV and including it in the price of the house. When the home finally sold, the buyer didn't want the TV.

Great...the dumbasses from Florida are flocking here because the hicks are better educated.

 

[RoarinSonoran]

In before Gunz

America's Most Overpriced Real Estate Markets

By Matt Woolsey, Forbes.com

May 11, 2007

No matter the locale, its denizens almost always gripe about the stiff cost of living, housing and doing business. But in some places the financial pain is clearly more acute than others.

Take San Diego. A slumping housing market, where only 5% of residents can afford the median home, and a high price-to-earnings ratio made the oceanfront city our most overpriced real estate market. Had weather been included as a statistical measurement, there's no doubt San Diego would have avoided our list of top 10 most overpriced cities--but we didn't factor in sunshine.

Arriving at the relative value of a given market isn't as simple as calculating median home prices, income rates and cost of living. Instead, our list of most overpriced real estate markets incorporates a more meaningful methodology.

Behind The Numbers

Using the 40 largest metro areas, we started by estimating a "price-to-earnings" ratio for each market. (Like the P/E of a stock, this value attempts to measure the price a homeowner would pay for one dollar of return.) Using data from the National Association of Realtors (NAR), the U.S. Census Bureau and the Office of Federal Housing Enterprise Oversight, we took each market's median home price and divided it by annual rents minus taxes and insurance for those properties. (We assumed for this exercise that other costs don't vary drastically from city to city.)

The average P/E for the 40 markets is 28. Note: Unlike, say, the S&P 500 index of stocks, ours is not a weighted-average P/E. If it were, certain cities with greater overall sheer market value would carry more weight.

We incorporated a second metric: an affordability index. Calculated from National Home Builder Association and Wells Fargo data, the affordability score is the percent of the population who can afford to buy the median-priced home, assuming a 6% mortgage rate. In a city like Los Angeles, No. 4 on the list, a wee 2% of homes are affordable for residents pulling down a median income.

Consider Detroit. Almost 88% of its homes are available to those with a median income, and its 17.5 P/E ratio appears relatively low, but that doesn't make real estate in the Motor City a good investment. Already stagnant home prices have decreased at a rate of 1% over the last year and, of the major metros, Detroit is the only one on our list to have lost jobs since 2005 (other than New Orleans, which we left off; in the wake of Hurricane Katrina the city's statistical figures were such anomalies that it wasn't comparable to the rest of the cities).

So which markets are in bubble territory? Look for a high P/E ratio, low affordability, low income growth and a high cost of living.

San Francisco, ranked fourth, fits that bill. Despite home prices growing at a 2% clip over last year, according to the NAR, the city by the bay ranks third to last in expected income growth, reports Moody's. Not good news in a market where only 7.5% of housing is affordable for the median-income earner. Combine that with a housing P/E ratio over 50, and it isn't difficult to imagine some softening on the horizon.

The usual suspects littered our list: Miami came in second, followed in order by: Sacramento, Calif.; San Francisco; Washington, D.C.; Honolulu; New York; Los Angeles; and Boston. San Jose, Calif., rounded out the top 10.

 

[Capn Crunch]

A boat's a hole in the water you pour money into. I'm lucky if I can sell this thing for a clam shack in the eastern Virginia muck.

 

[Pole Cat]

About to put my house that I bought in '02 on the market here in Baltimore. Things have definitely slowed down, but there isn't really a problem with competing with new construction here in the city. I'm having a really hard time trying to figure out a price point. Added to the uncertainty of the market, is the fact that i live in a pre-civil war stone duplex for which there are few, if any, comps on the market. I'm hoping it might satisfy some kind of niche market demand that is immune from the general market trends. But here's hoping that all goes well. About to graduate law school and I have lots of debt to get rid of.

 

[Chadstroma]

About to put my house that I bought in '02 on the market here in Baltimore. Things have definitely slowed down, but there isn't really a problem with competing with new construction here in the city. I'm having a really hard time trying to figure out a price point. Added to the uncertainty of the market, is the fact that i live in a pre-civil war stone duplex for which there are few, if any, comps on the market. I'm hoping it might satisfy some kind of niche market demand that is immune from the general market trends. But here's hoping that all goes well. About to graduate law school and I have lots of debt to get rid of.

What I would do in your situation is set up 'interviews' with realators. Invite them to your house- ask them what they would do to sell your house including how much. Go with the one you feel is most knowledgable with your area and particular niche home. Then get an idea of what market value is and list it slightly under. A major problem a lot of homeowners have in a slow market like this is that they get too caught up in what the market WAS like a year ago and they get too greedy. You do not want a 'stale' home that has been on the market forever and you have to lower your price over and over and end up below what you could have sold it quickly if you just slightly under priced it. A lot of times, even in a cold market an under priced home that goes on the market will have a couple of bids right away and there is a chance to sell it for actual market value. If not, you have to realize that you did not 'lose' anything and that you got the property sold quickly- and as we all know- time is money.

 

[qazqaz11]

Although our house prices are probably considered low compared to what most americans are paying, our house prices (in Edmonton,Alta.)have skyrocketed in the past 3 yrs. The 2BR - 2BR 1000 sq. ft. si-rise condo that I purchased for $150K in Sept. '04 would easily sell for well over $300K today. Average house prices rose from Mar. to Apr. of this year from $385K to $410K and condo prices rose from $246k to $261K. Predictions are that house and condo prices will rise AT LEAST 5%-6% PER MONTH until at least Sept of this year when they are expected to slow down to ONLY 2%-3% PER MONTH. Sure glad I moved back to town when I retired and purchased right away otherwise today I might need a mortgage.

 

[Chadstroma]

Where Home Prices Are Hot Now

by Dean Treftz

Friday, May 11, 2007

Despite a National Downturn, Some Markets That Missed the The Housing Boom Are Thriving; Fleeing Florida for Charlotte

The housing news isn't all grim. Even as prices sag nationwide, there are several cities in the country where home values are climbing smartly.

Portland, Ore., Boise, Idaho, Seattle, Salt Lake City, Houston, Austin, and Charlotte and Raleigh, N.C., are among the cities bucking the national trend. Homes' appreciation there between the fourth quarters of 2005 and 2006 far exceeded the national average of 5.9%, according to the Office of Federal Housing Enterprise Oversight. In some markets, like Boise and Seattle, the appreciation jumped well into the double digits.

"All real estate is local, despite the headlines," says Lawrence Yun, the senior economist for the National Association of Realtors. Nationwide, the median existing-home price fell 1.3%, to $212,800 in February from $215,700 in February 2006, according to preliminary NAR statistics.

There's no single secret of these cities' apparent success, but many of them missed the housing boom of the past five years. From 2001 to 2005, annual appreciation in these cities was between 2% and 5%, far slower than the 7% to 12% national average, according to the Office of Federal Housing Enterprise Oversight. (OFHEO calculates appreciation based on repeat sales or refinancings of the same single-family properties.) Now, prices are playing catch-up.

Industry and Education

Most of the cities also have one or more strong industries to drive their economies -- colleges and technology in Raleigh, banks in Charlotte, energy in Houston and aerospace in Seattle. And all have education levels above the national average.

These cities emerged from the last recession later than most of the country for various reasons, including the lagging technology, aviation and energy industries, says Mark Zandi, CEO of Moody's Economy.com. Now, their economies are strong and housing prices are still perceived as affordable, luring buyers into the market. For instance, the median sales price for a single-family home in the area of Austin-Round Rock, Texas, is $173,700, according to the National Association of Realtors, compared with $371,200 in the Miami-Fort Lauderdale-Miami Beach area.

So many Northeasterners who moved to Florida have resettled in the Charlotte area in recent years -- both workers and retirees -- that Henry Scala and others in Charlotte refer to them as "halfbacks."

The influx may have helped Mr. Scala when he moved across town in January. "I was faced with selling this house in theoretically a down market," the 36-year resident of Charlotte says. "But there was no down market in Charlotte." Charlotte-area house prices grew 9.09% from the fourth quarter of 2005 to the fourth quarter of 2006 -- the fastest appreciation the metro area has seen since 1982, according to OFHEO. Mr. Scala got his $800,000 asking price in four days.

Today's declining prices nationwide are in part the result of an earlier explosion of short-term investors in Florida, California and other booming markets. Recently, both investors and long-term homeowners have been cashing in or cutting losses in formerly hot markets and settling in areas that avoided the boom, such as the Carolinas, parts of Georgia and Tennessee, areas of Texas, the Western mountain states and the Pacific Northwest.

"We're cutting and running," jokes Mark Hoover, 47 years old. Mr. Hoover and his wife, Melissa, 35, are both in the mortgage business, and they are moving from Florida to Austin to work for PRO-30, a mortgage lender based in Novato, Calif. But the Hoovers' move hasn't been easy. Their vacation home in Wellington, Fla., near West Palm Beach, has been on the market since October with a price tag of about $900,000, and their $1 million-to-$1.5 million primary home outside Fort Lauderdale, Fla., has sat since February.

From Portland to Austin

Now, the Hoovers are ready for stable, low-cost, "homey" Austin, where houses appreciated at a steady 6.7% annual rate between the fourth quarters of 2004 and 2005, even as Fort Lauderdale's prices skyrocketed more than 30% before dropping off recently. The Hoovers recently paid about $400,000 for a home on five acres outside Austin and have plans to move in the next two months.

The growth of Portland, Salt Lake City, Boise and Seattle can be attributed in part to an influx of former Californians and people opting out of slumping Las Vegas or Phoenix. The trend may have created smaller echo booms -- especially in Boise and Salt Lake City -- which have slowed in the past several months, with each city experiencing a slow winter. Other areas, too, have experienced faster-than-average appreciation, including the New York City borough of Manhattan and New Orleans.

While some worry that a new group of cities could face a boom-and-bust cycle, local real-estate agents and economists predict stable growth for the near future. Since the cities have strong economies and builders, lenders and investors are increasingly cautious, homes are less likely to become extremely overvalued than in booming markets in the first half of the decade.

Mr. Yun of the National Association of Realtors predicts prices nationally will bottom out sometime this summer. Mr. Zandi, of Moody's Economy.com, isn't so sanguine. "I'd be shocked if [prices stop depreciating] this summer; it's more likely next summer," he says.

Laura Chung, an interior decorator who recently moved to Portland, Ore., from Cambridge, Mass., sees the strong market as the ultimate stress reliever. Mrs. Chung, and her husband, Eric, are considering sprucing up their new home and selling it if they find a house more to their liking -- a prospect that wasn't so simple back in Cambridge. "It's not this perpetual worry that we're not going to sell" the 2,500-square-foot house, she says. While Mrs. Chung's move to Portland had nothing to do with the housing prices, they "definitely ease the wallet a little."

After sitting on the market from June to December 2006, the Chungs' 1,200-square-foot Cambridge, Mass. townhouse condominium sold for $70,000 less than the asking price. "The number of condos in our price point was at some record high," Mrs. Chung says.

To attract a buyer, their real-estate agent suggested purchasing a flat-screen TV and including it in the price of the house. When the home finally sold, the buyer didn't want the TV.

 

[snitwitch]

In before Gunz

America's Most Overpriced Real Estate Markets

By Matt Woolsey, Forbes.com

May 11, 2007

No matter the locale, its denizens almost always gripe about the stiff cost of living, housing and doing business. But in some places the financial pain is clearly more acute than others.

Take San Diego. A slumping housing market, where only 5% of residents can afford the median home, and a high price-to-earnings ratio made the oceanfront city our most overpriced real estate market. Had weather been included as a statistical measurement, there's no doubt San Diego would have avoided our list of top 10 most overpriced cities--but we didn't factor in sunshine.

Arriving at the relative value of a given market isn't as simple as calculating median home prices, income rates and cost of living. Instead, our list of most overpriced real estate markets incorporates a more meaningful methodology.

Behind The Numbers

Using the 40 largest metro areas, we started by estimating a "price-to-earnings" ratio for each market. (Like the P/E of a stock, this value attempts to measure the price a homeowner would pay for one dollar of return.) Using data from the National Association of Realtors (NAR), the U.S. Census Bureau and the Office of Federal Housing Enterprise Oversight, we took each market's median home price and divided it by annual rents minus taxes and insurance for those properties. (We assumed for this exercise that other costs don't vary drastically from city to city.)

The average P/E for the 40 markets is 28. Note: Unlike, say, the S&P 500 index of stocks, ours is not a weighted-average P/E. If it were, certain cities with greater overall sheer market value would carry more weight.

We incorporated a second metric: an affordability index. Calculated from National Home Builder Association and Wells Fargo data, the affordability score is the percent of the population who can afford to buy the median-priced home, assuming a 6% mortgage rate. In a city like Los Angeles, No. 4 on the list, a wee 2% of homes are affordable for residents pulling down a median income.

Consider Detroit. Almost 88% of its homes are available to those with a median income, and its 17.5 P/E ratio appears relatively low, but that doesn't make real estate in the Motor City a good investment. Already stagnant home prices have decreased at a rate of 1% over the last year and, of the major metros, Detroit is the only one on our list to have lost jobs since 2005 (other than New Orleans, which we left off; in the wake of Hurricane Katrina the city's statistical figures were such anomalies that it wasn't comparable to the rest of the cities).

So which markets are in bubble territory? Look for a high P/E ratio, low affordability, low income growth and a high cost of living.

San Francisco, ranked fourth, fits that bill. Despite home prices growing at a 2% clip over last year, according to the NAR, the city by the bay ranks third to last in expected income growth, reports Moody's. Not good news in a market where only 7.5% of housing is affordable for the median-income earner. Combine that with a housing P/E ratio over 50, and it isn't difficult to imagine some softening on the horizon.

The usual suspects littered our list: Miami came in second, followed in order by: Sacramento, Calif.; San Francisco; Washington, D.C.; Honolulu; New York; Los Angeles; and Boston. San Jose, Calif., rounded out the top 10.

I call BS on this. Silicon Valley is primed to create so many new jobs over the next 10 years it ain't even funny.

 

[tommyGunZ]

In before Gunz

America's Most Overpriced Real Estate Markets

By Matt Woolsey, Forbes.com

May 11, 2007

No matter the locale, its denizens almost always gripe about the stiff cost of living, housing and doing business. But in some places the financial pain is clearly more acute than others.

Take San Diego. A slumping housing market, where only 5% of residents can afford the median home, and a high price-to-earnings ratio made the oceanfront city our most overpriced real estate market. Had weather been included as a statistical measurement, there's no doubt San Diego would have avoided our list of top 10 most overpriced cities--but we didn't factor in sunshine.

This was on the front page of the San Diego Business section this morning, just under an article reporting subprime lender Accredited Loans Inc. is taking a financial bloodbath and slashed 1300 jobs.Going to be some pretty good deals in San Diego late 2008...

 

[snitwitch]

In before Gunz

America's Most Overpriced Real Estate Markets

By Matt Woolsey, Forbes.com

May 11, 2007

No matter the locale, its denizens almost always gripe about the stiff cost of living, housing and doing business. But in some places the financial pain is clearly more acute than others.

Take San Diego. A slumping housing market, where only 5% of residents can afford the median home, and a high price-to-earnings ratio made the oceanfront city our most overpriced real estate market. Had weather been included as a statistical measurement, there's no doubt San Diego would have avoided our list of top 10 most overpriced cities--but we didn't factor in sunshine.

This was on the front page of the San Diego Business section this morning, just under an article reporting subprime lender Accredited Loans Inc. is taking a financial bloodbath and slashed 1300 jobs.Going to be some pretty good deals in San Diego late 2008...

Tgunz, I am seriously contemplating a move to your fine city.Do you see EOY 2008 as the best time to buy? Wait longer?

What can you tell me about the northern suburb areas and their RE markets? La Jolla, Del Mar, Encinitas, eta...

 

[tommyGunZ]

In before Gunz

America's Most Overpriced Real Estate Markets

By Matt Woolsey, Forbes.com

May 11, 2007

No matter the locale, its denizens almost always gripe about the stiff cost of living, housing and doing business. But in some places the financial pain is clearly more acute than others.

Take San Diego. A slumping housing market, where only 5% of residents can afford the median home, and a high price-to-earnings ratio made the oceanfront city our most overpriced real estate market. Had weather been included as a statistical measurement, there's no doubt San Diego would have avoided our list of top 10 most overpriced cities--but we didn't factor in sunshine.

This was on the front page of the San Diego Business section this morning, just under an article reporting subprime lender Accredited Loans Inc. is taking a financial bloodbath and slashed 1300 jobs.Going to be some pretty good deals in San Diego late 2008...

Tgunz, I am seriously contemplating a move to your fine city.Do you see EOY 2008 as the best time to buy? Wait longer?

What can you tell me about the northern suburb areas and their RE markets? La Jolla, Del Mar, Encinitas, eta...

I'm not a RE expert, so I'll point you to a couple of sites for real analysis of the San Diego market without the Realtor spin. Piggington is a blog/site operated by an economic analyst in San Diego who also contributes housing pieces to the Voice of San Diego, an independent news site. His "Bubble Primer" on the middle of the first page contains 4 essays that are strong pieces showing how out of whack SD RE fundamentals are.

Bubbleinfo is a blog written by a North SD County RE agent who got sick of reading all of the NAR and CAR spin when housing had clearly made a turn in late '05. He posts a lot of analysis of the North County Coastal market, mostly data couple with his first hand observations.

Again, I'm not a RE expert by any means, but I see prices continuing to fall significantly over the next couple years before a long flat period in order for home prices to fall back in line with rents and incomes. The loose lending and low interest rates fueled lots of speculative buying by investors and people getting in way over their heads in San Diego the past few years. Historically, home prices have overcorrected after housing booms to values lower than their pre-boom price. I'm not banking on that happening, but I am firmly in the camp that believes it's a far better bet to wait a year or two before buying instead of getting into the market ASAP.

 

[Chadstroma]

In before Gunz

America's Most Overpriced Real Estate Markets

By Matt Woolsey, Forbes.com

May 11, 2007

No matter the locale, its denizens almost always gripe about the stiff cost of living, housing and doing business. But in some places the financial pain is clearly more acute than others.

Take San Diego. A slumping housing market, where only 5% of residents can afford the median home, and a high price-to-earnings ratio made the oceanfront city our most overpriced real estate market. Had weather been included as a statistical measurement, there's no doubt San Diego would have avoided our list of top 10 most overpriced cities--but we didn't factor in sunshine.

This was on the front page of the San Diego Business section this morning, just under an article reporting subprime lender Accredited Loans Inc. is taking a financial bloodbath and slashed 1300 jobs.Going to be some pretty good deals in San Diego late 2008...

Tgunz, I am seriously contemplating a move to your fine city.Do you see EOY 2008 as the best time to buy? Wait longer?

What can you tell me about the northern suburb areas and their RE markets? La Jolla, Del Mar, Encinitas, eta...

I am hoping I time things right- planning on moving back to So Cal in about a year- give or take. Hopefully the market is a buyers market near the bottum of the downslide by then. Likely will be looking more towards L.A. than S.D. though.

 

[snitwitch]

In before Gunz

America's Most Overpriced Real Estate Markets

By Matt Woolsey, Forbes.com

May 11, 2007

No matter the locale, its denizens almost always gripe about the stiff cost of living, housing and doing business. But in some places the financial pain is clearly more acute than others.

Take San Diego. A slumping housing market, where only 5% of residents can afford the median home, and a high price-to-earnings ratio made the oceanfront city our most overpriced real estate market. Had weather been included as a statistical measurement, there's no doubt San Diego would have avoided our list of top 10 most overpriced cities--but we didn't factor in sunshine.

This was on the front page of the San Diego Business section this morning, just under an article reporting subprime lender Accredited Loans Inc. is taking a financial bloodbath and slashed 1300 jobs.Going to be some pretty good deals in San Diego late 2008...

Tgunz, I am seriously contemplating a move to your fine city.Do you see EOY 2008 as the best time to buy? Wait longer?

What can you tell me about the northern suburb areas and their RE markets? La Jolla, Del Mar, Encinitas, eta...

I'm not a RE expert, so I'll point you to a couple of sites for real analysis of the San Diego market without the Realtor spin. Piggington is a blog/site operated by an economic analyst in San Diego who also contributes housing pieces to the Voice of San Diego, an independent news site. His "Bubble Primer" on the middle of the first page contains 4 essays that are strong pieces showing how out of whack SD RE fundamentals are.

Bubbleinfo is a blog written by a North SD County RE agent who got sick of reading all of the NAR and CAR spin when housing had clearly made a turn in late '05. He posts a lot of analysis of the North County Coastal market, mostly data couple with his first hand observations.

Again, I'm not a RE expert by any means, but I see prices continuing to fall significantly over the next couple years before a long flat period in order for home prices to fall back in line with rents and incomes. The loose lending and low interest rates fueled lots of speculative buying by investors and people getting in way over their heads in San Diego the past few years. Historically, home prices have overcorrected after housing booms to values lower than their pre-boom price. I'm not banking on that happening, but I am firmly in the camp that believes it's a far better bet to wait a year or two before buying instead of getting into the market ASAP.

Thanks for this.

 

[KGB]

you act like people who bought 2 years ago will never make any money. if they stay in their place for 10 years they'll be very happy with their purchase.

I bough 9 months ago in AZ when the market bottomed and have made 9% on my place based on sales over the last two months. Prices have been stable after the initial drop.Prices don't collapse until the job market collapses...I don't know how many times I have to state this in this thread.

there are 60K homes on the market in Maricopa County. I'm glad your investment appears to be a wise one but you're sadly mistaken if you think your market has sniffed the bottom.

it depends on what you call on the market.there are 52k homes active.

another 1k homes in the contingency stage.

there's another 6.5k pending

there's your 60k.

i personally think a better barometer is active homes, but as long as everyone is using apples to apples its fine. the problem is that different people define it different ways so people think it is worse/better than it is based on mis information.

I agree with bagger here. the 60k number I saw wasn't broken down in this manner. 52k active homes is what I'd consider the inventory.

I originally thought you were saying there were $60,000 homes on the market.

 

[Chadstroma]

you act like people who bought 2 years ago will never make any money. if they stay in their place for 10 years they'll be very happy with their purchase.

I bough 9 months ago in AZ when the market bottomed and have made 9% on my place based on sales over the last two months. Prices have been stable after the initial drop.Prices don't collapse until the job market collapses...I don't know how many times I have to state this in this thread.

there are 60K homes on the market in Maricopa County. I'm glad your investment appears to be a wise one but you're sadly mistaken if you think your market has sniffed the bottom.

it depends on what you call on the market.there are 52k homes active.

another 1k homes in the contingency stage.

there's another 6.5k pending

there's your 60k.

i personally think a better barometer is active homes, but as long as everyone is using apples to apples its fine. the problem is that different people define it different ways so people think it is worse/better than it is based on mis information.

I agree with bagger here. the 60k number I saw wasn't broken down in this manner. 52k active homes is what I'd consider the inventory.

I originally thought you were saying there were $60,000 homes on the market.

Go to Detroit and reportedly you can get a decent size house for $29K! Obviously that is an extreme but for the smart and no faint hearted investor there may be money to be made in Detroit.

 

[set57hike]

Update?

 

[tommyGunZ]

SLBD is a slut.

Hey GunZ - what's the housing market update? I miss that thread.

A funny, but logical thing happening in San Diego markets. B/c housing is so unaffordable and subprime/suicide lending is drying up, the bottom buyers of the housing pyramid have completely vanished. So what you have is sales 20-30% off of even last years down numbers, but because wealthy, good credit folks are still buying, only the higher end homes are selling. Which results in the median price actually rising, while real prices are falling.This creates the illusion that the market is somewhat stable (because the media reports the median price) when in reality the market is in shambles for anything below 500k.

 

[Gr00vus]

Driving to work today I saw some posters up on some freeway underpass pillars advertising "how to get rich off foreclosures" seminars. I've never seen anything like that before in my life.

I've also been seeing open house signs stay up past the weekend these last few months (for a few years there were no open house signs, then they'd be up Saturday, down Sunday, then up all weekend, now this), and seen some houses on the market for literally a year at this point in my parents' neighborhood.

Just some anecdotal observations to share.

 

[zander_s]

Prices still going up in Orange County California from what I see.

Maybe, but that bubble is just waiting to burst!!

 

[tommyGunZ]

From a real estate analyst on another board:

It really is amazing the diversity of opinion as to what is coming and why real estate prices go down. I asked one economist how he would rate the importance of a record number of foreclosures to sell against in California. on a scale of 10 being of utmost importance, he gave a record number of foreclosures a #1...not significant. The front cover of the C.A.R. Realtor magazine has a heading about California Affordability. You won't believe their conclusion. They formed a committee to discuss the problem and decided that California builders are just not building enough affordable homes. It said that in California, we need builders to build 250,000 new homes and apartments. Guys, you may not realize it, but we have a housing shortage! Somebody please tell the builders, because in Riverside County they are paying 8% commission and lowering prices to sell the stuff off. Talk about a disconnect from reality.As far as declining prices, it's already here and it's in nearly every county. The median prices don't reflect what's happening because the lower 25% of our market isn't moving due to all the lenders ceasing their subprime loan activities. The median price will be taking a huge hit by next year. Just so you know, i'm not saying this in defense of any prediction. I get a report that re-appraises the same properties {100s of them all over S. Calif.} every six months. many of these properties have price declines in just the past six months of 2-10%; including O.C. Anyone saying we are still increasing in price as a state isn't being honest. i talked to Leslie Appleton Young last week before she was to address a Realtor group. She made the same comment to me, that the lower priced inventory had just stopped selling and when it resumes the reality of what is occurring will be obvious.

 

[OC Zed]

Prices still going up in Orange County California from what I see.

Maybe, but that bubble is just waiting to burst!!

Prices have held solid here in the OC, but sales volume is way down. It's as if buyers and sellers are speaking two different languages.From my own personal experience of looking for a house in the past few months, my wife and I were amazed as to how out of touch many brokers and sellers are about the current demand. It's like they think it's a scientific law that home prices can only increase at 6% incements and values can never retreat.This is the same mentality that I witnessed with the dot-com craze 8 years ago. You would think people would have learned their lesson...

 

[tommyGunZ]

However, Robert Campbell, an independent San Diego economist who publishes a newsletter advising people about when to invest in housing, said a strong economy and low interest rates can't eclipse the market's need to return to price levels that more closely reflect the region's income levels. Campbell said he believes the county is in store for a severe price decline, in the neighborhood of 35 percent."This boom took prices twice as high as normal cycles," he said. "People talk about high gas prices. But what is really stalling the economy and could actually bring the economy down is overpriced housing. Affordability, of course, hit the wall. The market is just exhausted."Clearly, said Leamer, the boom market of the recent past was anything but normal."In a normal market, people buy homes as places to live," he said. "In abnormal times, people buy homes as investments."Leamer said he also would not classify the current market as normal, as it is "correcting for the excesses of 2001 through 2006."Economists and real estate analysts are in agreement that a correcting down cycle is under way. They disagree on how long it will last.Lund, the broker, predicts 18 more months, while Appleton-Young's crystal ball says 18 to 24 months.Leamer maintains the cycle will last three more years; Campbell suggests four.Borrowing a baseball analogy, Campbell said, "We've got innings four through nine to go ---- and that's assuming we don't have extra innings."

 

[the rover]

TGunz, can you afford a house yet? Since you started this I sold another house and moved again. Made another $80K.