Showing posts with label Bubble Talk. Show all posts
Showing posts with label Bubble Talk. Show all posts

4/16/2014

Housing Affordability in Southern California Is Once Again Raising Its Head

March 2014 Prices for Long Beach
Sales of lower to medium-priced homes have become a challenge. 

First time buyers are feeling the effects as inventory levels remain low, and multiple offers are a continuing feature of the market in many instances.   In the last year, some zip codes in the Long Beach area saw a 20% increase in the average price of a single family home, yet sales volume is low.  Younger, first time buyers are the most impacted by the increase--financing has higher requirements to meet and many younger buyers have heavier debts. 
"Housing affordability is really taking a bite out of the market," said Leslie Appleton-Young, chief economist for the California Assn. of Realtors. "We haven't seen this issue since 2007."
Investor activity in the market has actually leveled off since 2013 as prices have risen, and combined with some buyer frustration and buyer loan qualification issues, this combined effects have actually left many homes on the market for longer, a paradoxical effect to the competition over certain homes.   The March stats for Long Beach, for example, show a 20% range increase to the average and median home prices of $450,000 to $504,000 for the last 12 months, as well as a very modest 15% increase in supply of inventory.  But that inventory is still well below the 6-month supply level, but still, it's an increase. 

So it's unknown how long this slowdown in the lower ranges may be here, but if you're a solidly pre-approved homebuyer who is financially prepared, seeing some houses sit on the market a little longer could mean the chance for you.

http://www.latimes.com/business/realestate/la-fi-home-prices-20140416,0,4794538.story#ixzz2z5asarPC

5/15/2008

Is April 2008 the Bottom of the U.S. Housing Market?


According to this Opinion article by Cyril Moulle-Berteaux, in the Wall Street Journal, May 6, 2008, it might be--


  • "Home sales peaked in July 2005" (I can buy that. In August 2005, the time on market started stretching out longer and longer. But it was August of 2007, when the loan credit shrank, that prices started to drop.)

  • "Prices got so high that people who intended to actually live in the houses they purchased...stopped buying". Yes, the speculators left the building.

  • "It now takes 19% of monthly income for the average home buyer, and 31% of monthly income for the first-time home buyer, to purchase a house. In other words, homes on average are back to being as affordable as during the best of times in the 1990s." And due to the reduction in types of loans, first-time buyers especially are at a disadvantage.

  • "When the rate of house-price declines halves, there will be a wholesale shift in markets' perceptions." So in other words, could there be a shift in supply vs demand as people start to recognize some good buys?

  • "House prices won't stop falling entirely until inventories reach five months of supply sometime in 2009. A five-month supply has historically signaled tightness in the housing market." He says we will see seven months supply by the end of 2008; currently, in many areas there is 10-11 months supply on the market.

  • "Even if home sales pick up, how can home prices stop falling with so many houses vacant and unsold? The flip but true answer: because they always do." Another answer is that there are a lot of cash and 50% cash buyers -- not everyone is a first-time buyer -- and the cash buyers eventually become active in the market.

What do you think? Is is time to sow new ground yet, like those civic-minded Rotary guys in the old photo (local park, by the way)? Are we close to the bottom the market? If you don't think so, or you do, just leave a comment.


5/23/2007

Clearing Up the Loan Picture

Since I frequently hold open houses I regularly talk to prospective buyers. It's no secret that sales volume has dropped and that predictions abound about the coming drop in prices. I think one of the reasons for buyers holding off is because home shoppers feel like they're shopping in a store when the Big One hits, and suddenly their thrown into another aisle where all around them is shopper's chaos. Recent events in the subprime market have helped the speculation, but may this will add in some perspective about our current economy, which is, after all, still strong:

The Mortgage Bankers Association, in its testimony to Congress last fall, said that homeownership rates are at record levels, nearly 69 percent. It stands to reason that with a higher rate of ownership, there is a higher rate of foreclosure.


Delinquency rates typically peak 3 to 5 years after origination, which is in keeping with record home sales and record loans following 2001. In other words, this was to be expected.


Approximately 1 percent of all loans are in the foreclosure process, well within historical norms, according to the MBA. That’s still less than the post-recession peak of 1.5 percent just four years ago.


Three out of four loans that enter the foreclosure process will not wind up as a foreclosure sale, either because the home owner cures the delinquency, works out a payment plan with the lender, refinances, or sells the home.


Somewhere between 0.5 percent and 1 percent of all homes going into foreclosure are owned by subprime borrowers, according to estimates by Walt Molony, spokesman for the NATIONAL ASSOCIATION OF REALTORS®. On the low end, that's one home in foreclosure out of approximately 200, suggesting that high foreclosure rates are not just a subprime problem but due to a wide range of other causes.


Finally, subprime borrowers are higher risks and have always had a higher delinquency rate than prime borrowers. Yet, only six percent of home owners are nonprime borrowers with adjustable rate loans that are resetting to higher rates.


2/12/2007

California's Median Selling Price in December

The median price of an existing, single-family detached home in California during December 2006 was $567,690, a 3.7 percent increase over the revised $547,400 median for December 2005, C.A.R. reported. The December 2006 median price increased 2.2 percent compared with November’s revised $555,280 median price.


While this is a statewide figure published as of January 25th, and the Los Angeles area's median house price of $584,600 is somewhat less when you look at Dataquick's figures (which combine house and condo prices), nevertheless, California home prices continue to reflect an economic fact despite a much lower sales volume than the last several years.

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1/09/2007

Bubble's pop was akin to a slow leak-K. Harney

There will be much talk about foreclosures this year: Those adjustable rate mortgages are coming out of their initial lower start period, and much to the surprise of some borrowers, are now the source of some bumps in their homeownership road. If you're reading this and think you're one of those people, just e-mail, leave a comment, or call for financing information. In many cases, a worst case scenario can be headed off with a new loan made with full disclosures about how it works. You may be paying a little higher interest rate for a while, but you can usually fix that after you bring up your credit score so that you can get a more competitive loan. This process may save you and keep you in the home you want. Understanding financing is crucial in today's world which offers so many options--it's important to understand their terms before you sign on the dotted line. Read here about more commentary on national markets, including the 7% appreciation overall in the Long Beach/Los Angeles area in spite of decreased sales volume. Bubble's pop was akin to a slow leak - Los Angeles Times.
For more real estate information go to www.juliahuntsman.com.

12/04/2006

More Consensus That Worst May Be Over

Investment firm analysts and the Federal Reserve Chairman Ben Bernanke are among those that are ready to think about an improvement in the market. All the bad news in the media may have helped to create a self-fulfilling prophecy about the market, and so now good news in the media may help to get buyers and sellers into a better mode. To be sure, some properties have been overpriced, but a healthy economy does not usually create the setting for a bad housing market. Click on the link for the Los Angeles Times article.

11/14/2006

Los Angeles and San Francisco: Bubbleproof?


CNN/Money rates these 2 California cities as good for investors. Take note of the average annual appreciation--3.7% annually for Los Angeles since 1949. High end development is the draw now, while current homeowners are still seeing plenty of equity in their properties.

6/12/2006

Public Not Buying Housing "Crisis", At Least Not In Texas

From Real Estate Center Online News:

COLLEGE STATION – Despite media reports that the housing market faces imminent collapse, a study released this week shows consumers are confident real estate values will remain solid even if mortgage rates increase.

Three-quarters of respondents to ING Direct's most recent homeowner study said they had very little concern about the future value of their homes. The study is based on a national survey conducted by Synovate, a global research firm.

Most survey respondents (85 percent) believe their homes increased in value during the last three years. While homeowners felt their homes have increased in value by approximately 6 percent in the last year, they only expect values to increase by about 4 percent in the next 12 months.

Real Estate Center Chief Economist Mark Dotzour said the survey shows many Americans are smart enough not to believe everything they see on television, such as media reports that a housing bubble is about to burst.

Dotzour said that not only is the housing market not tanking, but home price appreciation is a red-hot 12.54 percent for the entire nation.

“This is still extraordinary price movement,” he said. “You have to go back to 1979 to find this level of appreciation prior to the current boom.

“While the nation’s inventory of unsold homes was six months in April, homes typically continue to increase in value when inventories are at this level. Texas inventory levels are lower than the national average. With a five-month inventory, Texas homes are likely to continue their recent appreciation trends."

6/23/2004

Another No-Bubble Report

The New York Federal Reserve Bank's study says the widely cited "bubble evidence" doesn't take into account other housing issues over the last decade: Article here.
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