When the RE Music is Over...

[CamB]

And you know it is all supply and demand. Until that demand goes away, prices will stay high.

Nah, its also ability to pay, which I guess forms part of "demand", but theoretically the demand side should be lead by immigration (into the US or from other states) or people moving into cities, etc.

The ability to pay is really high right now - easy, cheap credit and the majority of people already have overvalued equity to transfer from one house to another.

[dd74]

Originally posted by CamB

Nah, its also ability to pay, which I guess forms part of "demand", but theoretically the demand side should be lead by immigration (into the US or from other states) or people moving into cities, etc.

The ability to pay is really high right now - easy, cheap credit and the majority of people already have overvalued equity to transfer from one house to another.

Yes, and the ability to pay in certain parts of Los Angeles, as Todd says, does not correspond with the national average, so what Tabs speaks of doesn't necessarily represent the entire country. "The Industry" as do other industries, pays large fees here, and many people work for those industries. I just don't see a major crash happening around here. Like I said, a house on the corner from mine went in a week about a month ago, and for $200,000 more than asking; and the place was a wreck.

Here, it's supply and demand and money. Almost weekly, we get agents calling us at home, begging us to let them sell our house...

As for immigration, that's interesting. Much of Glendale and now large portions of San Fernando Valley are Armenian and Iranian now. So that segment also has money and its presence is well known.

In a way, it's really a buyer's market in L.A. It just depends on how much money the buyer is willing to spend. All I can say now is come with a lot of dough; the admission price is killer around here.

[CamB]

Dave - I agree with both you and Todd. Some parts of the market operate on completely different bases. When you need to worry is when the "meat and potatoes" of the housing stock get way out of whack.

[1967 R50/2]

Apparently the bubble is not bursting.


http://money.cnn.com/2005/09/13/real_estate/buying_selling/real_estate_fall_trends/index.htm?section=money_pf

[turbo6bar]

All articles I've seen indicate inventories are climbing steadily, along with lower Median NEW home prices, and higher exisitng home prices. It looks like many are running for the exits, but this turkey ain't done. However, if you look at homebuilder stocks, and FNM, FRE, you'll notice they've taken quite a hit. You can infer the experts are predicting lean times ahead.

[1967 R50/2]

Originally posted by turbo6bar
All articles I've seen indicate inventories are climbing steadily, along with lower Median NEW home prices, and higher exisitng home prices.

Please post some of these articles. I am curious. That isn't what I am seeing locally....except for the higher existing home prices.

[turbo6bar]

Oh, boy. Where do I start?

Southern Oregon
"For the fifth consecutive month, home sales in the county�s urban, or incorporated, areas have declined from 2004 levels. The inventory of houses on the market in those areas has grown 21 percent over the past year. Still, August�s median sale point rose to $275,000 from $223,250, according to figures compiled by Medford appraiser Roy Wright."

S.D. blazes new trail in housing slowdown
"San Diego County, which set the pace for Southern California's rapid climb in home prices, could be leading the region in a slowing of appreciation that has brought prices to just above last year's levels.... Last month's sales in San Diego County continued a 14-month slowdown, DataQuick's report showed. There were 5,379 transactions last month, down 3.6 percent from August 2004. The highest sales count in this cycle was reached in June 2004 when 6,208 sales were recorded."

Home Sales Statistics August 2005
"Average sales prices continued to climb through August in Northern Virginia, despite significant increases in inventory and fewer sales. Average sales prices rose to $558,880, a 24% increase over August 2004's average of $449,678. Sales were 8% lower this month compared to the same time last year while active listings were up 47%."

Things appear desperate in Detroit:
Reality invades Metro Detroit's housing market
The entire article is nothing but gloom. It's rather shocking.

Median home prices on Long Island rise again
Median prices continue to skyrocket, but inventories climb. Price reductions emerging.

From ziprealty.com, Phoenix listings have grown from 10748 on 7/30/05 to 16816 on 9/14/05. What's that, 50-60% increase in inventory?

CONDO UH-OH: Softening Manhatten prices

I will try to find some info on Florida and the Northwest.

[motion]

I can confirm a definite slow-down in Phoenix. Open house showings have slowed down to almost nothing, and inventory is rising fast. The Phoenix newspaper is predicting 6% appreciation for 2006.

[1967 R50/2]

6% appreciation is still appreciation...I would not call that a bubble popping. At least not until we see a flat line or depreciation.

[turbo6bar]

Patience, young grasshopper. It took some time to appreciate, and it will take some time to deflate. Word is prices will reach the apogee and hang until inventories reach a point at which time reality must be accepted. Keep appendages near torso. It will get ugly.

[Wrecked944]

Foreclosures are exploding in Massachusetts - up 29% this year. Here is a quote from an article published today...

"Through July, foreclosure filings are up 29 percent statewide over last year, according to the report by ForeclosuresMass.com, a Web site for real estate professionals, investors and mortgage brokers.

In July, the most recent month for which data is available, 1,001 foreclosures were filed statewide, up from 611 during the same month in 2004, according to the company.

Increases are taking place in every county, except Dukes.

Foreclosure filings in Bristol County so far this year are up 36.46 percent over 2004 — the third highest percentage increase of any county in the state.

There were 83 foreclosures in Bristol County in July, compared to 50 in July 2004. Bristol County posted a total of 539 foreclosures so far this year, compared with 395 filings for the same period in 2004.

Foreclosure filings are up 33.5 percent with 708 so far this year in Plymouth County, where there were a total of 530 filings for the same period in 2004. In July, there were 100 foreclosure filings in Plymouth County, compared to just 82 in July 2004.

Foreclosure filings are up 36.41 percent in Norfolk County, from 532 so far this year, compared with 390 in the same period in 2004."

[1967 R50/2]

I went to Foreclosuresmass.com. They only list a few properties. If you don't have but 4 properties in foreclosure and you add one more...well that's a 25% increase. But still not many foreclosures.

I'm not a real estate agent or anything...In fact I hope the market declines because I am a renter, but I am just not seeing it around here.

[turbo6bar]

from an investing newsletter a few days ago:

Housing Affordability

In 1999, 30 yr fixed rates were 8%. A $2000 payment would service a mortgage of $275k. Today, with 5.5% 30 yr fixed rates, the $2000/month will get you a $350k home. That's a 27% increase. Let's not stop there. Using an interest-only financing, $2000/month gets you into a $440k mortgage. Not to be outdone, lenders offered the interest-only ARM. With rates recently at 4.25%, $2000/month will give you a mortgage of $565k. Would anyone care to work the numbers with a teaser 1% introductory rate advertised in markets like San Diego?

$565k/$275k = 105% increase

[Evans, Marv]

Turb:
I hear those low teaser rates advertised on the radio all the time in the S.D. area. I live in the south bay area of S.D. - the 6th fastest growing area of the U.S. I see young ladies (20s) driving BIG SUVs (Escalades, etc.) all over the place. One young couple I know (he's an electrical engineer, she's a teacher, probably better off than lots) recently sold a small house (recent development) in the area for 580K and bought one for 950K. Her comment was, "Why not? May as well do it while we can". I hear of so many maxxed out on credit, taking out huge home equity loans, buying like mad. It really scares me. Maybe I don't see something, but if there is a blip in the economy, interest rates, the economy goes down, whatever - I see a lot of people loosing their lifestyles and wondering what happened. Daily I hear advertisements - no credit, bad credit, no problem. Just scarry.

[turbo6bar]

Hehe, Evans. It does not surprise me. Stories like that are pretty common. New bankruptcy laws in October will make it harder to just walk away when things start to get tight. Bankruptcy filings have skyrocketed before the new law goes into effect.

The Economist states the value of residential real estate in developed countries has grown from $40 trillion to $70 trillion in five years. The numbers are staggering.

It is different this time. This is the new economy.