what's going on with real estate?

Quote from dandxg:

Too funny, my wife works for Pulte, but handles mortgages in Ill, not NV.

I am sorry, no I am not, but it serves these speculators right. These are the same dummies that bought high in the tech bubble and now want to blame their broker.

A savy investor could have driven around neighborhoods I bet and seen the surplus of inventory.

Here is a tip for your speculators, when the incentives seem to good to be true say, 40k for a SFR, that's a whisper that inventory is building. My wife has seen it a few times already in the ILL market throughout 2005.
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On this note, one of the Canadian national newspapers commented last summer on the explosion of the quantity of mortgage brokers in Canada. I forget the exact numbers, so I won't try to quote, but the quantity of mortgage brokers right now compared to mortgage brokers 5-10 years ago was a huge difference.

In all fairness, the overall mortgage industry has changed, with brokers becoming more popular. But the stats were still quite interesting. Brokers that got into the business 5-10 years ago likely did quite well for themselves in many cases, but I sure wouldn't want to be hopping in now.

I should also mention that the business model for brokers is a bit different up here in Canada than what I understand it is in the US. In the US I believe that brokers get wholesale rates and then mark them up (or charge fees to clients, or both); in Canada the brokers are compensated directly by the mortgage companies for bringing business to them.
 
Quote from Scribe:

Everyone is biased.

Demographia definitely blames the steep increase in housing prices on government "smart-growth" policies causing land scarcity.

I don't agree with that as the sole cause but it doesn't change the reality of the survey statistics they report. Which confirms what many people have already noticed - housing prices have increased far faster than incomes. It isn't just an issue in the US but a global trend. Actually the US is much better off than many countries where a majority of the major metro areas (or all of them) are unaffordable.

I wish they had more data (I would like to see 30 or 50 year charts).

The good news is that the problem seems to be localized to certain markets. Maybe it will resolve itself with flat housing prices and increasing incomes over the next 5 to 10 years (the soft landing) in those markets. It might resolve itself thru steep price declines (inversely related to interest rate increases).

It just seems safer to me to watch from the sidelines right now rather than participate in the speculation. But I know Joe Sixpack can't resist the lure of easy money. Until it isn't: http://www.reviewjournal.com/lvrj_home/2005/Jul-22-Fri-2005/business/2597431.html


Or maybe "this time it's different".:)
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i blame cheap easy money & low interest rates. the fed made both available to counter deflation. unfortunately the side-effect is housing prices increases [affordability at multi-decade high] and we also get inflation.
 
More Canadian perspective:

Housing market warning
'Could be softening': Royal hints at peak as CMHC OKs 30-year mortgages

http://www.canada.com/nationalpost/financialpost/story.html?id=b593f02e-7bc1-4c5e-9356-873023d2d589

Royal Bank is one of Canada's big national banks, the more important/interesting point in this article is that CMHC will now be providing mortgage insurance for amortizations of 30 years. Our two big mortage insurance providers in Canada are CMHC (a crown corporation) and Genworth (formerly GE Capital).

30 year amortizations are not a common thing in Canada, some of the subprime lenders have recently started offering them, but CMHC doing so essentially endorses high-ratio lending to everyone using ams of 30 years.
 
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