Housing Rolling Along 2

Any comments on the Fed report that housing prices "appear" to have bottomed? My gut tells me that they have been so hawkish that now they fear that there is too much fear in the market.

Any thoughts from those of you who follow the sector? (Homebuilding stocks have been recovering a bit)
 
Quote from FuturesTrader71:

Any comments on the Fed report that housing prices "appear" to have bottomed? My gut tells me that they have been so hawkish that now they fear that there is too much fear in the market.

Any thoughts from those of you who follow the sector? (Homebuilding stocks have been recovering a bit)
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Well...the latest housing report showed the prices dropped a little bit, but sales were up, meaning that the backlog of unsold houses decreased. My interpretation of this data, (and I admit that I'm a housing bull with a long-term perspective), is that prices dropped enough to where sales are now (barely) exceeding the supply. If this continues, eventually the backlog will dry up and prices will rise. There is good reason to believe it will continue...interest rates...

Please remember we are talking averages here, not isolated circumstances of someone's california cousin's brother-in-law.

It just seems to me that if the rate at which houses sold increased, this is a signal that we're near the bottom, but on what side of the curve is anyone's guess.

One other thing to consider is that one of the most important factors in housing prices is where long-term interest rates are. Rates have been dropping a heck of a lot lately...enough to where I'm personally running numbers regarding consolidating debt myself. Check into it yourself. Falling interest rates can have much more of a bearing on peoples purchase decisions than housing prices because they are looking at how much the payment will be, not how much the house cost. In effect, though the prices of houses may be fallen somewhat in my area over the past year, the PAYMENT of those houses has plummetted. This may be why sales are increasing.

Lastly, interest rates have dropped enough lately that some of the folks holding ARMs which will reset soon may have a decent shot at refinancing rather than lose their houses as the doomsayers bandy about. I'm not talking about the people who are upsidedown in their house in a coastal California areas (many books I've read say California is on a regular boom and bust cycle), but the bulk of these folks have a good shot at making an orderly transition out of them. I think this is why foreclosures have still been relatively small (except for your friend's cousin's California brother-in-law).

SM
 
30 year fixed rate mortgage has dropped to 5.65 over the past 6 months.

The 10 year T is at 4.43.

Money has been getting cheaper..... Are we in for a softer landing in RE than most doomsdayers are predicting? Time will tell.
 
The dollar or the economy ... it is a tough call.

Beware of death by a 1000 cuts.
This could be the outcome of an impossible balancing act.

Just remember that Allan balanced the act beautifully for two decades and left a well balanced hole many trillion deeper than when he started digging.
 
Quote from Midas:

30 year fixed rate mortgage has dropped to 5.65 over the past 6 months.

The 10 year T is at 4.43.

Money has been getting cheaper..... Are we in for a softer landing in RE than most doomsdayers are predicting? Time will tell.
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It is interesting. And the dollar is plummeting. Hey, for fun, I ran a sensitivity analysis on interest rates vs housing prices. If interest rates were to rise a full percentage point from their current value, it would offset a 10% drop in the homes value. So basically, if home prices dropped another 10%, but interest rates rise 1%, the payment would be no different than it is today. I guess both could happen over the next year, but I think we'll see half of both. Even the housing bears might agree that Housing prices may not be bottoming, but house payments just may be.

Except for your friend's cousin's California brother in law...

SM
 
Quote from jem:

1. The primary point is when you first published your stats i was there in San diego looking to help my brother by a house. I did the comps in Carlsbad and I gave examples. houses that were 1.2 mill in la costa oaks were being offered as value range marketing 1.1 -1.2.

La Costa Valley same deal. North carlsbad same deal.

Sales showed a little less than a 10% drop. Although there were very few sales.

Speaking with informed agents in the area that was the way it was. The paper had just previously reported about a 7-8 percent drop from the high. My friend predicted the next report would be about 10% and it was.

I have no idea where you got your numbers from.

As far as where zillow gets it sales data from. I believe they once said. However even if they did not I know that Finis and other companies provide data from the tax records fairly cheaply. I also noticed that the zillow data trailed my mls data by about 2 months. Which is probably the lag between the agent reporting the close to the mls and the time it gets recorded published and stored in the database.

Sales data is sales data. As I said before the art or the informed thing to do is figure out which comps are worth using as comps. You might find the zillow data confusing. I do not. If the comps they choose are good recent comps and there are enough recent comps to be valid then the zillow estimate is generally pretty good although it may lag by a few months because MLS data is more timely.

I look at recent sales and figure out what the price of a home should be.

I can do that with zillow data, tax records or mls data. Then I make adjustments to house based on how it shows and other subjective criteria.

What I can tell you is that carlsbad had in no way experienced the drop you had published. Had it I would have been able to by my old home back for what I sold it for in 2003. For instance I sold my house in Carlsbad for 675 in 2003. At the peak of the market it may have been worth over 900 for a few months.

A neighbor was asking about 875 for the same house with a slightly better yard. But it was getting no offers.

That was the San diego market in a nutshell. I have no idea where you got the numbers you published.

However the simple thing to do would be to show me the date the article was written and then we can establish whether the market was really off 25% for the stated area.
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My x wife and her boyfriend sold their year old house in La Costa Greens and only took about a 80k hit on it. It was sold to some lady who was moving down from the Bay area. She got the money from a trust or death of mother, I forget which.

I was surprised they only lost that little but, it was bought by an uniformed buyer from another city with even crazier real estate prices using inherited money.

The guy went to San Marcos and got $50k off the listed price of a new home built by Pulte or DR Horton, I forget which so in his mind he sort of broke even

The house was on Korite Street.

John
 
The FED has a real delima here. With the dollar getting beat up overseas and gold up high and economy slowing the pressure will be to cut rates. That will in turn further hammer the dollar and push gold & inflation risks up. Its going to be interesting to see which poison the FED accepts. ARMs expiring into lower interest rates will relieve selling/refinancing pressure but the dollar getting beat up will attract a ton of foreign investors and new money. But there is also a matter of national pride, prestige, and clout with respect the the nation's currency. I wonder how low we let it go before FED steps in or we start calling in political favors from global central bankers? This could all resolve to an acid test of America's current global standing with trading partners. It will be interesting to see what friends and foes shake out.

TS
 
Quote from Son of a Gann:

Florida RE still very strong

http://www.nytimes.com/2006/12/06/b...em&ex=1165554000&en=812d7e0e8006dab4&ei=5087
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????
Are you shure you got right article?

This statement and the article have nothing in common - the article is pretty negative on RE in general and FL in particular. No happy news. Here is the typical quote:

" But that wasn’t what happened at the auction. In fact, if you were at the beach club that Saturday, you could have been excused for thinking that the real estate market was crashing.

One three-bedroom ranch house with a pool sold for $671,000. In 2005, the same house sold for $809,000. Another house, just steps from Naples Bay, sold for $880,000 at the auction., compared with $1.35 million a year earlier. On average, the houses that changed hands at the auction had fallen about 25 percent in value since 2005, according to Thomas Lawler, a real estate consultant who analyzed the auction’s results."
 
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