Housing Rolling Along 2

http://www.dailynews.com/business/ci_4112317
“It looks like this unwinding real-estate market is going to make more of a mess than expected. ‘I don’t think there is any doubt it’s going to be a harder landing than was originally forecast,’ said financial analyst Greg McBride. ‘The forecasts were made with the rose-colored glasses still firmly in place.’”

“In some places prices in June did something not seen in a long time, fall under year-ago levels. Of the 101 markets in Los Angeles County, the median price in 16 fell under the year-ago level, including Tarzana ($567,000, down 27.2 percent) and Calabasas ($1.1 million, down 17 percent), according to DataQuick.”

“A tipping point may be fast approaching here in the Valley, too. ‘The fact is appreciation has pushed affordability beyond the bounds of many buyers and that, coupled with a rising interest-rate environment is bound to have an effect on people,’ McBride said.”


http://www.ocregister.com/ocregister/money/homepage/article_1227404.php
“There was one troubling trend in the numbers, county treasurer John Moorlach said. The percentage of unpaid tax reached its highest level in eight years. Owners stiffed the county out of 1.52 percent of taxes owed. In dollar terms, the $57.7 million in unpaid taxes increased 44 percent vs. a year ago.”


http://www.sdbj.com/industry_articl...36729.1341678.3458155.5820413.212&aID2=103197
“‘The condo market is where most of the major correction is taking place,’ economist Lynn Reaser said. Another certain sign that the housing boom is over is the length of time houses are staying on the market, Reaser noted. ‘People who have their house on the market can’t believe they aren’t getting their asking price.’”


http://www.nctimes.com/articles/2006/07/30/news/californian/16_01_357_29_06.txt
“Danny Morris, who rents a house in Menifee, said tenants are in a pretty good position now, at least compared with people who own their house. Morris pays less than $1,400 a month to live in a 1,450-square-foot house. The average Southern California homebuyer, meanwhile, committed to a $2,437 mortgage payment last month, according to DataQuick.”

“‘It’s better for a renter right now than for a buyer,’ Morris said. ‘I know some of them have humongous payments, and there’s no way they can get that out of a renter.’”

“Pat Davis, who manages roughly 100 local rental houses, said she actually expects more houses to come onto the rental market in the next year. That’s because many investors are finding it more difficult to ‘flip’ houses, to sell them quickly for profit without renting them out. When the houses don’t sell, such investors are being forced to find renters just to cover the mortgages on the houses, Davis said.”


http://www.thereporter.com/business/ci_4111943
“Inventory levels in Solano County rose 56 percent, year-over-year, according to a second quarter report. Sales for the county experienced a 29 percent decline over the same period last year.”


http://www.azcentral.com/news/articles/0730emotional0730.html
‘Something’s going to happen. Something’s going to blow.’”

“He was right. The client whirled suddenly and whipped the phone at him. But he was ready. He ducked, and the phone shattered against the wall behind him. The client stormed out of the house.”

“‘Her eyes just started to well up, and she just started bawling,’ Barry said. ‘She said she couldn’t sell them for what she bought them for. She said her monthly payments were about $20,000.’”
 
Realtors can check the listing history in the MLS - its simple. re-pacakaging any commodity after its become stale seems like a good approach - it seems legal and ethical, although it may tiptoe along the border of gray area?

Quote from murray t turtle:

===============

I am usually getting both sides of story; but will speculate, since her liscense ' was 'pulled ''

Probably was not a key stroke error;
but simple marketing that the word quote ''new'' unquote can be powerful & effective.

Rising rates can make it more interesting;
especially if adjustable. Prefer fixed , if mortgaged.:cool:
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:confused:
 
Quote from onewaypockets:


http://www.azcentral.com/news/articles/0730emotional0730.html
‘Something’s going to happen. Something’s going to blow.’”

“He was right. The client whirled suddenly and whipped the phone at him. But he was ready. He ducked, and the phone shattered against the wall behind him. The client stormed out of the house.”

“‘Her eyes just started to well up, and she just started bawling,’ Barry said. ‘She said she couldn’t sell them for what she bought them for. She said her monthly payments were about $20,000.’”
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The comments that follow the article are priceless.

I had a discussion with a realtor who was the first I've met to say the current market conditions in the area sucked... Most of the realtors spout the "blue sky" attitude, everything is great!!! LOL
 
July 26 (Bloomberg) -- Nothing has been more important in driving the
U.S. economic expansion that began nearly five years ago than
housing. It could be just as vital as growth slows.

Federal Reserve officials are watching warily to see whether the
housing retrenchment that began late last year will remain modest or
turn into a rout that could damage the economy severely.

The Fed raised interest rates 17 consecutive times over the past two
years to keep inflation under control, and the officials have
understood that at some point that would sting housing.

What has only become evident in recent months is that, perversely,
the big decline in housing affordability -- due to the combination of
double-digit housing price increases year after year and higher
mortgage-interest rates -- would cause a surge in core inflation.

Would-be homeowners -- either priced out of the market or simply
fearful that the value of a home purchased now could fall in coming
months -- are renting instead. As a result, rents of residences and
the so-called owners' equivalent rent components of the consumer
price index have shot up this year.

Together, those carry such large weights in the CPI that their
increases accounted for almost two-thirds of the full percentage
point increase in the core CPI in the first half of this year. From
December to June, the core rose at a 3.2 percent annual rate, up from
a 2.2 percent rate in the second half of last year.

Housing Toll

The National Association of Homebuilders, never a fan of Fed-
engineered interest rate increases, complained about this development
in a letter to Senator Paul Sarbanes, the ranking Democrat on the
Senate Banking Committee, prior to Fed Chairman Ben S. Bernanke's
appearance before the committee on July 19.

NAHB ``believes that the Federal Reserve has been relying on
deficient inflation measures to rationalize the interest rate hikes
that have been taking a serious toll on the housing sector,'' Joseph
M. Stanton, the association's chief lobbyist, wrote.

``Ironically, much of the recent increase in `core' consumer price
inflation that the Federal Reserve is trying to control with higher
interest rates is coming from a weakening housing market, which is
increasing the demand for rental units. That, in turn, translates
into a sizeable increase in the large `owners' equivalent rent'
components of the core inflation measures,'' Stanton said.

``Fighting an increase in core inflation stemming from this component
is an inappropriate use of monetary policy, since tighter policy will
cause rents to rise further and put additional upward pressure on the
core inflation measures,'' he argued.

`Watching Very Carefully'

Sarbanes, in questioning Bernanke, asked whether the decline in
housing might go too far. And of the NAHB argument about rents, he
observed, ``That seems to me to have some validity.''

``On your first point about housing, we are watching the housing
market very carefully,'' the Fed chairman responded. ``Other parts of
the economy are picking up to offset some of the weakness we see in
the housing market. But we are watching that very carefully.''

As for the links among rising interest rates, a cooling housing
market, increasing rents and the surge in core CPI, Bernanke said
that the high weight rents carry in that index is one reason the Fed
prefers to focus on the core personal consumption expenditure price
index. The PCE index, he said, ``puts a much lower weight'' on rents,
he said.

Gradual Easing

In addition, Bernanke said, ``the increase in inflation we have seen
is a much broader phenomenon than that single component. If that
single component was the only issue, I would think twice.''

Presumably, the Fed chairman meant that he would think twice about
raising the Fed's target for the overnight lending rate if rents were
the only issue.

Even if rents aren't the only issue, the causes of why they are
rising so much mean that Fed officials do regard them somewhat
separately from the other inflationary pressures at work.
Essentially, the surge in rents is seen as a transitory phenomenon
that will ease gradually.

That process has begun in the Washington metropolitan area, according
to recent stories in the Washington Post. Rents are rising because of
an extremely low vacancy rate, partly because many potential
homebuyers have turned to renting instead.

Sale to Rent

Tens of thousands of new and existing condo units are on the market,
and thousands more are under construction. At least 4,000 upscale
condos that were to have been sold will be leased instead, the Post
said. In other instances, some older apartment complexes, which were
to be converted to condos, will be renovated and remain on the rental
market.

The Commerce Department reported yesterday that sales of existing
homes dropped 1.3 percent in June, to a 6.62 million unit annual
rate. That's almost 9 percent below the sales rate in June 2005.

The number of unsold homes on the market rose to 3.725 million units,
almost 40 percent more than a year earlier.

``This implies that we are only at an early stage of home sale
problems,'' economist Ken Mayland of ClearView Economics told his
clients. ``At some point along the way, prices could crack big
time.''

Fed officials recognize that possibility. It is probably their
greatest single worry about growth right now.

(John M. Berry is a Bloomberg News columnist. The opinions expressed
are his own.)
 
http://www.canada.com/nationalpost/...=9df77ce7-5bad-468c-836e-d177681c21f3&k=12968
The United States could be heading for its first outright decline in national house prices on record, according to several analysts watching the rapid deterioration in housing statistics south of the border.

“The slowdown in house price inflation has been extraordinarily rapid,” Gabrielle Stein, chief international economist at Lombard Street Research said in a report this week.

“Unlikely though it seems, the latest data … mean that falling house prices can no longer be ruled out. And if they do fall, then any thought of an orderly slowdown in the housing market must go out of the window.


http://www.nytimes.com/2006/07/30/r...28fcbbe2747499&ei=5088&partner=rssnyt&emc=rss
“Georgianna Velardi, a broker in Long Beach, said she had recently seen more sellers looking for a way out of high mortgage payments. A couple in their late 30’s came in to price their three-bedroom ranch. The interest rate on their mortgage had risen to 9.5 percent, from 3.5 percent three years ago. They didn’t have the equity or good credit to qualify for refinancing at a lower rate.”

“To make matters worse, the City of Long Beach raised property taxes 25 percent. ‘They needed to get out because they were so overwhelmed,’ Ms. Velardi said.”

“‘It’s not going to bottom out immediately,’ Ms. Marten said. ‘We’re going to see, I believe, what we saw in 1988: a flattening, a gradual downturn and then down and down until it hits bottom.’”


http://www.signonsandiego.com/uniontrib/20060730/news_1h30newhome.html
“San Diego County’s new housing market is beginning to look like the TV game show ‘Let’s Make a Deal,’ as builders throw in offers that include spiffy appliance packages, pet services and even a set of new wheels.”

“‘As we are now able to sit back and look at the market, I think what we’re going to recognize is that the second half of 2004 and first half of 2005 was the peak,’ MarketPointe President Russ Valone said. ‘The market peaked, and it’s now looking at where it’s going to settle in.’”

“Market watcher Sharon Hanley in Oceanside said the percentage of home-sale cancellations has run as high as nearly 40 percent certain weeks this year. They’re cutting staff significantly."
 
ok. before 9/11 rent was $2400 a month. They've risen 40-50% in 5 years.



Quote from drsteph:

Dude. That $1800/month was not too long after 9-11, when nobody wanted to live down by battery park city and the WTC site. Not a realistic comparison.

I'm sure land near Chernobyl is cheap too, but I'm not sure I would want to buy it.
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because it's nyc and you won't be able to find the equivalent apt renting at 3200 at a purchase price of $500k and plenty can't afford the downpayment.

$500k in midtown gets u a small 500 sq. foot studio.

@$900-$1000/sq foot, you're looking at nearly a million for an upscale 1000sq ft condo unit w/DOWNPAY of $500k. the mortgage payment in this scenario equals the rental price of equivalent unit.

i'm sure most people with the means to, do go and purchase.

so why live in nyc??? maybe it's just the trend.

Quote from Vinny1:

Why would anyone pay 3200 a month for a 1 bdrm, when 3200 can support a mortgage of around 500k; why don't these morons just buy something and own it instead of enriching their landlords?
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