The "official" housing bubble thread
This is "housing hell"???
09-14-2006, 01:54 AM
#562
Moderator Alumnus
Originally Posted by fdl
Last month was the second best August ever recorded, off moderately from the record 7,498 figure achieved in 2005. In addition, the year as a whole has seen 59,488 single-family dwelling sales, up marginally from 2005's January to August performance.
Yes, the number of transactions has cooled but prices are still rising at about 5% year over year. We are trending towards a more normal market, which is a good sign.
Out side of Toronto though, Vancouver and Calgary (especially) are rising at unhealthy paces.
Yes, the number of transactions has cooled but prices are still rising at about 5% year over year. We are trending towards a more normal market, which is a good sign.
Out side of Toronto though, Vancouver and Calgary (especially) are rising at unhealthy paces.
Sounds like the US, except replace Vancouver and Calgary for the West Coast and East Coast.
Canada has plenty to worry about in regards to their housing market, especially as the economy cools (Canada's GDP fell to 2% last quarter, unemployment increasing, etc...) because Alberta won't be able to keep your economy going especially if oil moderates for a while and all those investments are quite so urgent.
http://www.thestar.com/NASApp/cs/Con...l=969048863851
09-14-2006, 08:31 AM
#563
Senior Moderator
Originally Posted by Silver™
Sounds like the US, except replace Vancouver and Calgary for the West Coast and East Coast.
Canada has plenty to worry about in regards to their housing market, especially as the economy cools (Canada's GDP fell to 2% last quarter, unemployment increasing, etc...) because Alberta won't be able to keep your economy going especially if oil moderates for a while and all those investments are quite so urgent.
http://www.thestar.com/NASApp/cs/Con...l=969048863851
Canada has plenty to worry about in regards to their housing market, especially as the economy cools (Canada's GDP fell to 2% last quarter, unemployment increasing, etc...) because Alberta won't be able to keep your economy going especially if oil moderates for a while and all those investments are quite so urgent.
http://www.thestar.com/NASApp/cs/Con...l=969048863851
I disagree. The housing decline happening in the US simply hasnt been seen north of the border yet. We still have healthy levels of transactions and prices are still on the rise, only at a more moderate pace. We didnt see as extreme astronomical price increases either (outside of Vancouver and Calgary) as in the US.
This could change, but so far we seem to be in for a soft landing.
The sky isn't falling
For those of you who have just sunk all your savings into a new house in Toronto, there is good news and there is, well, a little bad. Good news first: Despite the nosedive that the real-estate market is taking south of the border, you haven't lost your shirt. Not yet.
But you may have just bought at what some experts are calling the tail end of a long seller's market.
After years of astonishing growth that has seen the average price of a home in the city top $365,000, the red hot Toronto market has finally cooled, according to Craig Alexander, a Toronto-Dominion Bank economist.
"While the Toronto market is strong, it is considerably less heated than we have seen over the last couple of years," says Mr. Alexander, who has been tracking the market this past year in a series of reports called Housing Bubble Watch.
"A year ago prices were rising at a single-digit rate, in the 7 to 8 per cent range," Mr. Alexander says. "Currently prices have moderated to 4 to 5 per cent."
For those of you who have just sunk all your savings into a new house in Toronto, there is good news and there is, well, a little bad. Good news first: Despite the nosedive that the real-estate market is taking south of the border, you haven't lost your shirt. Not yet.
But you may have just bought at what some experts are calling the tail end of a long seller's market.
After years of astonishing growth that has seen the average price of a home in the city top $365,000, the red hot Toronto market has finally cooled, according to Craig Alexander, a Toronto-Dominion Bank economist.
"While the Toronto market is strong, it is considerably less heated than we have seen over the last couple of years," says Mr. Alexander, who has been tracking the market this past year in a series of reports called Housing Bubble Watch.
"A year ago prices were rising at a single-digit rate, in the 7 to 8 per cent range," Mr. Alexander says. "Currently prices have moderated to 4 to 5 per cent."
Will housing boom bust?
One analyst sees a jarring halt.
Should the U.S. housing market bog down in an anticipated slump, its Canadian counterpart is likely to be in for a softer landing thanks to lower interest rates and a different attitude to home financing, observers say. "When you take a look at the new-home construction numbers, we've been running at the 200,000-plus level for a number of years — this will mark the fifth such year — and it's felt that generally this is in excess of what long-run demographic demand is," said Brent Weimer, senior economist with the Canada Mortgage and Housing Corporation.
"We see housing activity easing to a more long-run sustainable level."
In recent weeks, analysts have been debating an impending North American housing slowdown and the form it may take. Some say when the market drops, it will do so with a resounding crash, while others forecast a more gradual decline.
They also differ on how Canada and the U.S. will fare.
In Canada, rises in interest rates, increasing home prices and higher energy costs are nibbling away at affordability but the country has benefited from a strong housing market in the West, as more and more workers settle in Alberta, drawn by the province's energy boom.
Canadians have also seen less aggressive interest rate increases than in the United States, and are less likely to borrow as much money for their homes.
David Rosenberg, North American economist for Merrill Lynch, has pegged the odds of a "hard landing" in the U.S. between 40 per cent and 80 per cent — significantly above the consensus view of 27 per cent.
"Practically every indicator at our disposal tells us that we are very late in the cycle and the historical record also strongly suggests that the next wave after the Fed has inverted the entire yield curve is either a hard landing or a very bumpy soft landing," he said in a note.
Yesterday, U.S. luxury-home builder Toll Brothers Inc., based in Philadelphia, reported its third-quarter profits fell by 19 per cent as housing-market woes weighed on sales and caused the company to abandon some building locations.
A day earlier, home-improvement chain Lowe's Cos. warned that a slowing U.S. housing market will hurt its earnings for the rest of the year.
Bank of Montreal economist Douglas Porter said a correction in Canada "won't be nearly as severe as it's likely to be in the U.S., because the boom hasn't rumbled on as long (here)."
And while he expects housing starts and sales to weaken in 2007 and possibly in 2008, he doesn't see the impending slowdown as a sure thing.
"This housing cycle has been counted out a number of times in the past and it's proved to be a lot healthier than many economists believed possible," Porter said.
One analyst sees a jarring halt.
Should the U.S. housing market bog down in an anticipated slump, its Canadian counterpart is likely to be in for a softer landing thanks to lower interest rates and a different attitude to home financing, observers say. "When you take a look at the new-home construction numbers, we've been running at the 200,000-plus level for a number of years — this will mark the fifth such year — and it's felt that generally this is in excess of what long-run demographic demand is," said Brent Weimer, senior economist with the Canada Mortgage and Housing Corporation.
"We see housing activity easing to a more long-run sustainable level."
In recent weeks, analysts have been debating an impending North American housing slowdown and the form it may take. Some say when the market drops, it will do so with a resounding crash, while others forecast a more gradual decline.
They also differ on how Canada and the U.S. will fare.
In Canada, rises in interest rates, increasing home prices and higher energy costs are nibbling away at affordability but the country has benefited from a strong housing market in the West, as more and more workers settle in Alberta, drawn by the province's energy boom.
Canadians have also seen less aggressive interest rate increases than in the United States, and are less likely to borrow as much money for their homes.
David Rosenberg, North American economist for Merrill Lynch, has pegged the odds of a "hard landing" in the U.S. between 40 per cent and 80 per cent — significantly above the consensus view of 27 per cent.
"Practically every indicator at our disposal tells us that we are very late in the cycle and the historical record also strongly suggests that the next wave after the Fed has inverted the entire yield curve is either a hard landing or a very bumpy soft landing," he said in a note.
Yesterday, U.S. luxury-home builder Toll Brothers Inc., based in Philadelphia, reported its third-quarter profits fell by 19 per cent as housing-market woes weighed on sales and caused the company to abandon some building locations.
A day earlier, home-improvement chain Lowe's Cos. warned that a slowing U.S. housing market will hurt its earnings for the rest of the year.
Bank of Montreal economist Douglas Porter said a correction in Canada "won't be nearly as severe as it's likely to be in the U.S., because the boom hasn't rumbled on as long (here)."
And while he expects housing starts and sales to weaken in 2007 and possibly in 2008, he doesn't see the impending slowdown as a sure thing.
"This housing cycle has been counted out a number of times in the past and it's proved to be a lot healthier than many economists believed possible," Porter said.
09-17-2006, 06:56 PM
#567
Moderator Alumnus
Originally Posted by Fibonacci
More so than you at least... 
Yes because as you have predicted the dollar has crashed, the economy has gone into recession, the stock marker has declined, oil prices have continued to increase, the housing market has crashed, etc...
09-18-2006, 08:13 PM
#569
I feel the need...
File this under: How not to be an ostrich
Housing Slump in U.S. May Lead to First Drop Since Depression
http://www.bloomberg.com/apps/news?p...CRw&refer=home
http://www.bloomberg.com/apps/news?p...CRw&refer=home
Yield-Curve Recession Indicator Flashes Yellow
http://www.bloomberg.com/apps/news?p...columnist_baum
http://www.bloomberg.com/apps/news?p...columnist_baum
U.S. Relies on Foreign Investors to Buy Treasuries Amid Deficit
http://quote.bloomberg.com/apps/news...GLYgo&refer=us
http://quote.bloomberg.com/apps/news...GLYgo&refer=us
I'm not a
, but 
, as usual you are a proverbial day late and a dollar short...Like you, I am an optimist and pot committed to the USA. But unlike you, I look for transparency, accountability and cold-hard logic to make rational decisions.
09-25-2006, 04:52 PM
#570
I feel the need...
Houses, Hedge Funds -- No Place to Hide From Risk
http://www.bloomberg.com/apps/news?p...d=aaL4xeM02XCA
http://www.bloomberg.com/apps/news?p...d=aaL4xeM02XCA
Okay, will ease off now - think I've made my point...
Good luck folks, homeownership has great rewards, but for most people a home is a lousy investment.
09-25-2006, 05:16 PM
#571
Suzuka Master
U.S. house prices could drop another 10%
ROMA LUCIW
Globe and Mail Update
The U.S. housing slowdown is more severe than is being suggested and prices could fall another 10 per cent from current levels, according to National Bank Financial.
The U.S. National Association of Realtors said Monday that sales of previously-owned homes fell 0.5 per cent in August to a seasonally adjusted annual rate of 6.3 million units — the lowest since early 2004.
In a further sign of a drop-off in the housing boom, prices fell from year-ago levels for the first time since 1995. The median price of an existing home sold in August dipped to $225,000 (U.S.) , 1.7 per cent below the price in August 2005.
In a release, the National Association of Realtors said home sales appear to be levelling off to a more sustainable pace. "This is the price correction we've been expecting – with sales stabilizing, we should go back to positive price growth early next year," said David Lereah, NAR's chief economist. http://www.theglobeandmail.com/servl.../Business/home
ROMA LUCIW
Globe and Mail Update
The U.S. housing slowdown is more severe than is being suggested and prices could fall another 10 per cent from current levels, according to National Bank Financial.
The U.S. National Association of Realtors said Monday that sales of previously-owned homes fell 0.5 per cent in August to a seasonally adjusted annual rate of 6.3 million units — the lowest since early 2004.
In a further sign of a drop-off in the housing boom, prices fell from year-ago levels for the first time since 1995. The median price of an existing home sold in August dipped to $225,000 (U.S.) , 1.7 per cent below the price in August 2005.
In a release, the National Association of Realtors said home sales appear to be levelling off to a more sustainable pace. "This is the price correction we've been expecting – with sales stabilizing, we should go back to positive price growth early next year," said David Lereah, NAR's chief economist. http://www.theglobeandmail.com/servl.../Business/home
09-25-2006, 06:23 PM
#572
Moderator Alumnus
Originally Posted by Fibonacci
I'm not a , but , as usual you are a proverbial day late and a dollar short...
Like you, I am an optimist and pot committed to the USA. But unlike you, I look for transparency, accountability and cold-hard logic to make rational decisions.
, but , as usual you are a proverbial day late and a dollar short...Like you, I am an optimist and pot committed to the USA. But unlike you, I look for transparency, accountability and cold-hard logic to make rational decisions.
OK, Chicken Little. Still no recession, even though you have been warning of the yeild curve for quite a while now. Housing prices could decline, but that is far from a housing bubble popping. Stocks at record highs. Oil at year lows.
You sure are the resident guru
Post your current portfolio so that we know where NOT to put our money
09-25-2006, 07:27 PM
#573
Senior Moderator
Originally Posted by Fibonacci
09-25-2006, 07:30 PM
#574
I feel the need...
Originally Posted by Silver™
Post your current portfolio so that we know where NOT to put our money
My wacky little Californicator, while you are thinking of your next move - I'm already 10 moves ahead.
09-26-2006, 09:59 AM
#577
Senior Moderator
Furthest to fall?
The 10 most overvalued housing markets, according to Global Insight and National City.
City State Medianprice Percentovervalued
Naples FL $389,200 101.5%
Bend OR $296,700 89.3%
Salinas CA $618,400 79.4%
Merced CA $295,400 78.4%
Madera CA $311,000 76.9%
Port St. Lucie FL $240,800 74.0%
Stockton CA $346,600 73.9%
Santa Barbara CA $638,300 72.8%
Miami FL $292,800 70.8%
Punta Gorda FL $210,900 70.2%
Near the bottom already
The 10 most undervalued metro markets
City State Medianprice Pecent undervalued
College Station TX $97,100 22.3%
Dallas TX $129,900 21.2%
Ft. Worth TX $107,500 19.3%
Houston TX $113,000 17.3%
McAllen TX $57,300 16.4%
Shreveport LA $97,100 15.2%
Killeen TX $94,200 14.9%
Wichita Falls TX $74,500 13.8%
Tulsa OK $98,100 12.3%
Monroe LA $90,800 11.8%
More home markets 'extremely' overvalued
http://money.cnn.com/2006/09/21/real...ion=2006092116
Prediction: Housing prices are going down across the nation.
If the sentiment of traders is a valid indication, housing markets will be a lot lower next year.
Metro area Index (6/2006) Futures(8/2007) Diff.
Boston 177.90 164.40 -7.6%
Chicago 167.10 157.20 -5.9%
Denver 139.46 131.60 -5.6%
Las Vegas 233.75 214.60 -8.2%
Los Angeles 273.22 255.00 -6.7%
Miami 278.22 259.20 -6.8%
New York 212.79 202.00 -6.0%
San Diego 249.60 230.00 -7.9%
San Francisco 218.13 202.40 -7.2%
Washington 250.39 233.00 -6.9%
10-City 225.96 211.40 -6.4%
Source:Chicago Mercantile Exchange
Note: All cities were assigned a base of 100 in 2000. An index of 177.90 means prices have risen 77.9 percent since then.
Home futures: Price-drop seen for 10 top markets
http://money.cnn.com/2006/09/19/real...ion=2006091911
The 10 most overvalued housing markets, according to Global Insight and National City.
City State Medianprice Percentovervalued
Naples FL $389,200 101.5%
Bend OR $296,700 89.3%
Salinas CA $618,400 79.4%
Merced CA $295,400 78.4%
Madera CA $311,000 76.9%
Port St. Lucie FL $240,800 74.0%
Stockton CA $346,600 73.9%
Santa Barbara CA $638,300 72.8%
Miami FL $292,800 70.8%
Punta Gorda FL $210,900 70.2%
Near the bottom already
The 10 most undervalued metro markets
City State Medianprice Pecent undervalued
College Station TX $97,100 22.3%
Dallas TX $129,900 21.2%
Ft. Worth TX $107,500 19.3%
Houston TX $113,000 17.3%
McAllen TX $57,300 16.4%
Shreveport LA $97,100 15.2%
Killeen TX $94,200 14.9%
Wichita Falls TX $74,500 13.8%
Tulsa OK $98,100 12.3%
Monroe LA $90,800 11.8%
More home markets 'extremely' overvalued
http://money.cnn.com/2006/09/21/real...ion=2006092116
Prediction: Housing prices are going down across the nation.
If the sentiment of traders is a valid indication, housing markets will be a lot lower next year.
Metro area Index (6/2006) Futures(8/2007) Diff.
Boston 177.90 164.40 -7.6%
Chicago 167.10 157.20 -5.9%
Denver 139.46 131.60 -5.6%
Las Vegas 233.75 214.60 -8.2%
Los Angeles 273.22 255.00 -6.7%
Miami 278.22 259.20 -6.8%
New York 212.79 202.00 -6.0%
San Diego 249.60 230.00 -7.9%
San Francisco 218.13 202.40 -7.2%
Washington 250.39 233.00 -6.9%
10-City 225.96 211.40 -6.4%
Source:Chicago Mercantile Exchange
Note: All cities were assigned a base of 100 in 2000. An index of 177.90 means prices have risen 77.9 percent since then.
Home futures: Price-drop seen for 10 top markets
http://money.cnn.com/2006/09/19/real...ion=2006091911
09-26-2006, 10:30 AM
#578
I'm just glad that our market is 1% undervalued to begin with... so things here haven't been that bad. Houses are still selling and property values are still increasing, albeit slower then they were in 2005 and even earlier this year. But who cares, we're locked into a low fixed rate, and we're not going anywhere for some time. Even if we decide to move in the next 2-4 years, we'll be looking for a foreclosure. Lots of people bought $800k-$1mil plus homes with very high second mortgages. Would love to scoop one of those up at a discount 
But NY is feeling the crunch. Houses used to sell in days or weeks... now it's taking months. We had friends who sold in NY and their house was on the market for 8 months from Oct 2005 until May of this year... and it went for $30k under the original asking price. Just one year earlier (Sept 2004) our place sold in under 2 weeks and went for $25k over asking. And what sucks for them even more... they moved to West Palm Beach, FL... an area that is 56% OVERvalued. Crazy stuff. Glad we made our moves when and where we did!!
But NY is feeling the crunch. Houses used to sell in days or weeks... now it's taking months. We had friends who sold in NY and their house was on the market for 8 months from Oct 2005 until May of this year... and it went for $30k under the original asking price. Just one year earlier (Sept 2004) our place sold in under 2 weeks and went for $25k over asking. And what sucks for them even more... they moved to West Palm Beach, FL... an area that is 56% OVERvalued. Crazy stuff. Glad we made our moves when and where we did!!
09-26-2006, 10:38 AM
#580
Houses Won't Depreciate?
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Junior Lucked out for sure. But he is not part of the vast majority of exotic loan owners. Check the south Florida trend for median prices. The chart is NOT adjusted for inflation.
09-26-2006, 01:30 PM
#581
is learning to moonwalk i
People who purchased 2-5 years ago on a non-std mortgage and are having their rates/payments increased should not have much trouble refinancing and locking in a decent rate (rates are still very low). They should have gained enough equity in that time to qualify.
Those who purchased in the past year should still have at least two more before their loans start adjusting. A lot can change in two years.
Those who purchased in the past year should still have at least two more before their loans start adjusting. A lot can change in two years.
09-29-2006, 07:12 PM
#582
I feel the need...
Think Housing's Stabilized? See Cancellations
The effect of higher cancellations is ``to overstate the overall level of sales and understate the level of inventories,'' Carson says. The opposite is true at the bottom of the economic cycle, when sales pick up and the resold homes aren't registered as a sale or removed from the ``for sale'' pile.
What makes the current situation so worrisome is the ``unprecedented inventory overhang, encompassing new and existing markets and many of the largest metropolitan areas,'' Carson says. ``Its sheer size raises the odds that prices will fall more and longer nationwide than they did in the 1990s.''
http://bloomberg.com/apps/news?pid=2...d=aFll0Y8wJuVQ
What makes the current situation so worrisome is the ``unprecedented inventory overhang, encompassing new and existing markets and many of the largest metropolitan areas,'' Carson says. ``Its sheer size raises the odds that prices will fall more and longer nationwide than they did in the 1990s.''
http://bloomberg.com/apps/news?pid=2...d=aFll0Y8wJuVQ
Unfortunately, a lot of people who thought real estate was a sure thing are getting caught with their pants down. It will probably take at least five years for the market to shake out.
10-02-2006, 10:47 PM
#583
Moderator Alumnus
The burden of housing costs in nearly every part of the country grew sharply from 2000 to 2005, according to new Census Bureau data being made public today. The numbers illustrate vividly the impact, often distributed unevenly, of the crushing combination of escalating real estate prices and largely stagnant incomes.
While many of the highest home values were on the coasts, in places like Southern California and Manhattan, many of the biggest jumps in the percentage of people paying a burdensome amount of their income for housing occurred in the Midwest and in suburbs nationwide, making it clear that the housing squeeze has reached deep into the middle class.
http://www.nytimes.com/2006/10/03/ny...rtner=homepage
While many of the highest home values were on the coasts, in places like Southern California and Manhattan, many of the biggest jumps in the percentage of people paying a burdensome amount of their income for housing occurred in the Midwest and in suburbs nationwide, making it clear that the housing squeeze has reached deep into the middle class.
http://www.nytimes.com/2006/10/03/ny...rtner=homepage
10-04-2006, 09:19 PM
#584
Houses Won't Depreciate?
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So who said that prices will never go down?
....
Palm Beach County's median price declined $25,400 to $386,000 in August, marking the first year-over-year drop in seven years, according to the Florida Association of Realtors. The August median for Broward County fell $24,200 to $362,800. It was the second month in a row that Broward's median declined on an annual basis....
Palm Beach County's median price declined $25,400 to $386,000 in August, marking the first year-over-year drop in seven years, according to the Florida Association of Realtors. The August median for Broward County fell $24,200 to $362,800. It was the second month in a row that Broward's median declined on an annual basis....
10-05-2006, 07:18 PM
#586
I feel the need...
U.S. House Prices May Slump Until 2009, Moody's Says
By Peter Woodifield
Oct. 5 (Bloomberg) -- House prices in U.S. metropolitan
areas including Las Vegas and Washington may decline by more
than 10 percent in the months ahead after borrowing costs
increased, a study by a Moody's Corp. unit shows.
Homes in Cape Coral, Florida, will fall by an estimated 19
percent between their peak in the fourth quarter of 2005 and the
second quarter of 2007, the biggest drop among cities covered by
the survey, Moody's Economy.com said in a PRNewswire statement
yesterday. The slump may last until 2009 in some states, it said.
``The housing-market downturn is in full swing,'' Mark Zandi,
chief economist of Moody's Economy.com, said in the statement.
``Whether the housing correction unravels into a crash will largely
depend on the secondary or indirect effects from the downturn.''
The sharpest slowdown in U.S. home-price growth in three
decades has pushed unsold homes to a record 4.4 million and slashed
earnings for builders such as Lennar Corp. and Toll Brothers Inc.
The U.S. median home price next year may fall for the first time
since the Great Depression, according to Gabriel Stein, chief
international economist with Lombard Street Research in London.
Prices in Las Vegas and Washington also peaked in the
fourth quarter of 2005, the survey showed. In Las Vegas, they
will slump 13 percent from then until the second quarter of
2009, while properties in the U.S. capital will lose 12 percent
of their value by the second quarter of 2008, Moody's forecast.
New York
Metropolitan areas in states such as California, Nevada and
Arizona will also have price declines of more than 10 percent,
Moody's Economy.com said. Seven of the largest 10 drops are in
cities in Florida and California. A total of 70 cities or other
built-up areas are covered by the Moody's report.
Prices won't fall significantly in every city, the survey
shows. In San Jose, California, the drop will probably amount to
just 0.2 percent between and first and second quarters of 2007.
That's the shortest and smallest estimated decline in any of the
areas in the survey.
Prices in New York peaked in the second quarter of this year
and will fall 3.5 percent by the end of 2008, the report said.
U.S. average home-price growth slowed to 1.17 percent
during the second quarter from 3.65 percent a year earlier, the
Office of Federal Housing Enterprise Oversight said Sept. 5.
That's the sharpest three-month plunge since the agency began
keeping records in 1975.
Mortgage Rates
The slowdown started as the U.S. Federal Reserve raised
interest 17 times in two years to 5.25 percent from 1 percent,
pushing up adjustable mortgage rates. Fixed-rate mortgages, which
are governed by long-term interest rates, have risen more slowly.
Fed Chairman Ben S. Bernanke said yesterday that the
housing market is in a ``substantial correction'' that will lop
about a percentage point off growth in the second half and
restrain the expansion next year.
The indirect effects of the housing decline include the
impact on the job market, consumer spending, lenders and the
global financial system as mortgage credit quality weakens, said
Moody's. The secondary effects have so far been modest, it said.
The housing market has also been affected by a lack of
buyers who intend to resell their properties quickly for a
profit, said Moody's. ``All of this has seemingly occurred
overnight,'' said Zandi.
Economists such as Jan Hatzius, chief U.S. economist with
Goldman Sachs Group Inc., expect the Fed to cut interest rates to
4 percent in 2007 as the housing downturn pushes up unemployment.
The housing boom lifted the U.S. median home price by 49
percent in the five years ended in 2005, according to the
Chicago-based National Association of Realtors. That added to
the net worth of homeowners and creating a so-called wealth
effect that spurred spending as homeowners refinanced and took
on more mortgage debt.
The following is a table of the 10 areas where Moody's
expects the biggest house price declines.
*T
City Percentage Peak Trough
Decline Year/ Year/
Peak-Trough Quarter Quarter
Cape Coral, Florida 18.6 2005/4 2007/2
Reno, Nevada 17.2 2005/4 2008/4
Merced, California 16.1 2005/4 2009/2
Stockton, California 15.7 2005/4 2008/4
Sarasota, Florida 14.0 2005/4 2007/3
Naples, Florida 13.8 2005/4 2007/3
Tucson, Arizona 13.4 2006/1 2008/2
Las Vegas, Nevada 12.9 2005/4 2009/2
Chico, California 12.6 2005/4 2008/2
Fresno, California 12.5 2006/1 2009/2
source: bloomberg
Oct. 5 (Bloomberg) -- House prices in U.S. metropolitan
areas including Las Vegas and Washington may decline by more
than 10 percent in the months ahead after borrowing costs
increased, a study by a Moody's Corp. unit shows.
Homes in Cape Coral, Florida, will fall by an estimated 19
percent between their peak in the fourth quarter of 2005 and the
second quarter of 2007, the biggest drop among cities covered by
the survey, Moody's Economy.com said in a PRNewswire statement
yesterday. The slump may last until 2009 in some states, it said.
``The housing-market downturn is in full swing,'' Mark Zandi,
chief economist of Moody's Economy.com, said in the statement.
``Whether the housing correction unravels into a crash will largely
depend on the secondary or indirect effects from the downturn.''
The sharpest slowdown in U.S. home-price growth in three
decades has pushed unsold homes to a record 4.4 million and slashed
earnings for builders such as Lennar Corp. and Toll Brothers Inc.
The U.S. median home price next year may fall for the first time
since the Great Depression, according to Gabriel Stein, chief
international economist with Lombard Street Research in London.
Prices in Las Vegas and Washington also peaked in the
fourth quarter of 2005, the survey showed. In Las Vegas, they
will slump 13 percent from then until the second quarter of
2009, while properties in the U.S. capital will lose 12 percent
of their value by the second quarter of 2008, Moody's forecast.
New York
Metropolitan areas in states such as California, Nevada and
Arizona will also have price declines of more than 10 percent,
Moody's Economy.com said. Seven of the largest 10 drops are in
cities in Florida and California. A total of 70 cities or other
built-up areas are covered by the Moody's report.
Prices won't fall significantly in every city, the survey
shows. In San Jose, California, the drop will probably amount to
just 0.2 percent between and first and second quarters of 2007.
That's the shortest and smallest estimated decline in any of the
areas in the survey.
Prices in New York peaked in the second quarter of this year
and will fall 3.5 percent by the end of 2008, the report said.
U.S. average home-price growth slowed to 1.17 percent
during the second quarter from 3.65 percent a year earlier, the
Office of Federal Housing Enterprise Oversight said Sept. 5.
That's the sharpest three-month plunge since the agency began
keeping records in 1975.
Mortgage Rates
The slowdown started as the U.S. Federal Reserve raised
interest 17 times in two years to 5.25 percent from 1 percent,
pushing up adjustable mortgage rates. Fixed-rate mortgages, which
are governed by long-term interest rates, have risen more slowly.
Fed Chairman Ben S. Bernanke said yesterday that the
housing market is in a ``substantial correction'' that will lop
about a percentage point off growth in the second half and
restrain the expansion next year.
The indirect effects of the housing decline include the
impact on the job market, consumer spending, lenders and the
global financial system as mortgage credit quality weakens, said
Moody's. The secondary effects have so far been modest, it said.
The housing market has also been affected by a lack of
buyers who intend to resell their properties quickly for a
profit, said Moody's. ``All of this has seemingly occurred
overnight,'' said Zandi.
Economists such as Jan Hatzius, chief U.S. economist with
Goldman Sachs Group Inc., expect the Fed to cut interest rates to
4 percent in 2007 as the housing downturn pushes up unemployment.
The housing boom lifted the U.S. median home price by 49
percent in the five years ended in 2005, according to the
Chicago-based National Association of Realtors. That added to
the net worth of homeowners and creating a so-called wealth
effect that spurred spending as homeowners refinanced and took
on more mortgage debt.
The following is a table of the 10 areas where Moody's
expects the biggest house price declines.
*T
City Percentage Peak Trough
Decline Year/ Year/
Peak-Trough Quarter Quarter
Cape Coral, Florida 18.6 2005/4 2007/2
Reno, Nevada 17.2 2005/4 2008/4
Merced, California 16.1 2005/4 2009/2
Stockton, California 15.7 2005/4 2008/4
Sarasota, Florida 14.0 2005/4 2007/3
Naples, Florida 13.8 2005/4 2007/3
Tucson, Arizona 13.4 2006/1 2008/2
Las Vegas, Nevada 12.9 2005/4 2009/2
Chico, California 12.6 2005/4 2008/2
Fresno, California 12.5 2006/1 2009/2
source: bloomberg
can't find link - so I'm posting directly 
10-08-2006, 10:49 PM
#587
Moderator Alumnus
Former Federal Reserve Chairman Alan Greenspan said that last week's rise in weekly mortgage applications could signal that the "worst may well be over'' for the U.S. housing industry, according to a report of a speech Greenspan gave in Canada on Friday.
Greenspan was referring to an Oc.t 4 report from the Mortgage Bankers Association which showed that mortgage applications rose a seasonally-adjusted 11.9% for the week ending Sept. 29, the largest increase in more than a year.
Refinancing applications were up 17.5% from the week before and accounted for almost 47% of all U.S. mortgage applications, their highest share since February 2005. See full story.
Greenspan, speaking at a conference in Calgary, saw this "flattening out" of mortgage activity compared to the steep declines seen in recent months as a good sign, according to a story published Friday by Bloomberg News.
http://www.marketwatch.com/News/Stor...67819F5DD8F%7D
Greenspan was referring to an Oc.t 4 report from the Mortgage Bankers Association which showed that mortgage applications rose a seasonally-adjusted 11.9% for the week ending Sept. 29, the largest increase in more than a year.
Refinancing applications were up 17.5% from the week before and accounted for almost 47% of all U.S. mortgage applications, their highest share since February 2005. See full story.
Greenspan, speaking at a conference in Calgary, saw this "flattening out" of mortgage activity compared to the steep declines seen in recent months as a good sign, according to a story published Friday by Bloomberg News.
http://www.marketwatch.com/News/Stor...67819F5DD8F%7D
10-10-2006, 12:37 PM
#589
Moderator Alumnus
The housing market will get worse before it gets better - that's the finding of an analysis by Moody's Economy.com.
In the survey of 379 metro areas, the study's authors project that nearly 20 areas eventually could experience a "crash," or a decline of more than 10 percent from peak to trough. The most hard-hit areas will be in California, the Southwest coast of Florida, and in Arizona and Nevada.
Nationwide, the study forecasts a 3.6 percent decline in the sales price of existing homes.
The table below shows only those markets among the 100 largest by population that are forecast to have declines. In an analysis that considered mortgage rates, the local job market and other factors, the study makes projections on when those markets would peak, when they would hit their worst point, and what the total decline would be.
http://money.cnn.com/2006/10/05/real...odys/index.htm (click on the link for the list)
In the survey of 379 metro areas, the study's authors project that nearly 20 areas eventually could experience a "crash," or a decline of more than 10 percent from peak to trough. The most hard-hit areas will be in California, the Southwest coast of Florida, and in Arizona and Nevada.
Nationwide, the study forecasts a 3.6 percent decline in the sales price of existing homes.
The table below shows only those markets among the 100 largest by population that are forecast to have declines. In an analysis that considered mortgage rates, the local job market and other factors, the study makes projections on when those markets would peak, when they would hit their worst point, and what the total decline would be.
http://money.cnn.com/2006/10/05/real...odys/index.htm (click on the link for the list)
10-15-2006, 02:54 PM
#590
Real Estate Bubble: Prices to drop or remain the same???
Hello,
I've read through all of the threads and did a lot of research online regarding the real estate boom and how it has slowed down.
But i was wondering, will prices on homes start to decrease and go back to where they were 6-8 years ago? Or did the boom bring the prices up and keep them up?
A house that was 90k 5 years ago is selling for 280k now. Would the price ever fall back down to around 150-200k or lower? Just asking what some of your opinions are on the market and how it will end up over the next few years!
Thanks!
-Rob
I've read through all of the threads and did a lot of research online regarding the real estate boom and how it has slowed down.
But i was wondering, will prices on homes start to decrease and go back to where they were 6-8 years ago? Or did the boom bring the prices up and keep them up?
A house that was 90k 5 years ago is selling for 280k now. Would the price ever fall back down to around 150-200k or lower? Just asking what some of your opinions are on the market and how it will end up over the next few years!
Thanks!
-Rob
10-16-2006, 12:14 AM
#591
05/5AT/Navi/ABP/Quartz
Sorry but nobodys' crystal ball is that good or we would all be richer. Too many variables to make either a general or specific recommendation.
1. State, City, Neighborhood are all factors as is specific price range.
2. What is the economy going to do?
3. Consumer confidence?
Generally, lots of areas are seeing over supply for sale which is driving prices down. This is not true in all areas or all segments.
The questions that remains unanswered are how far will they drop where they are declining and when will they hit bottom? Cant tell about a peak or valley untill it has been passed.
IMHO, houses should be purchased primairly for shelter, not investment. Do your research, buy what you can afford @ a good price and hope for the best. If there is a big difference between rent and similar house note, rent for a while.
1. State, City, Neighborhood are all factors as is specific price range.
2. What is the economy going to do?
3. Consumer confidence?
Generally, lots of areas are seeing over supply for sale which is driving prices down. This is not true in all areas or all segments.
The questions that remains unanswered are how far will they drop where they are declining and when will they hit bottom? Cant tell about a peak or valley untill it has been passed.
IMHO, houses should be purchased primairly for shelter, not investment. Do your research, buy what you can afford @ a good price and hope for the best. If there is a big difference between rent and similar house note, rent for a while.
10-16-2006, 06:28 AM
#592
dɐɹɔ ǝɥʇ ʇɐɥʍ
^^^ I agree
In this area, initially the volume of houses selling slowed, but the price remained, then folks became desperate and prices fell as much as 10% in this area and volume is still low. I have a friend in Westchester county and watches things closely and says its the same down there as it is in Orange county(ny).
I feel bad for those with interest only mortgages, they now have negative equity in their homes... but they should have been aware of the risk. A few more years like this and they will be in a world of shit, prices will drop faster then they recover.
This seems to be exclusive to single family homes, multi-family is still booming in this area as is commercial... I don't do industrial at all so I can't say one way or another.
In this area, initially the volume of houses selling slowed, but the price remained, then folks became desperate and prices fell as much as 10% in this area and volume is still low. I have a friend in Westchester county and watches things closely and says its the same down there as it is in Orange county(ny).
I feel bad for those with interest only mortgages, they now have negative equity in their homes... but they should have been aware of the risk. A few more years like this and they will be in a world of shit, prices will drop faster then they recover.
This seems to be exclusive to single family homes, multi-family is still booming in this area as is commercial... I don't do industrial at all so I can't say one way or another.
10-16-2006, 08:07 AM
#593
Senior Moderator
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Originally Posted by Tireguy
I feel bad for those with interest only mortgages, they now have negative equity in their homes... but they should have been aware of the risk. A few more years like this and they will be in a world of shit, prices will drop faster then they recover.
The I/O loan is the "living beyond your means loan" or the "live for the moment loan"
Just make sure you're around to catch the foreclosures when they happen. We're in constant touch with the local banks to see what's happening.
10-16-2006, 09:36 AM
#594
dɐɹɔ ǝɥʇ ʇɐɥʍ
Originally Posted by NSXNEXT
Correction: those wit I/O loans that are not paying extra principal. We have a 7/1 I/O that converts in 2112 but we are making extra principal payments.
The I/O loan is the "living beyond your means loan" or the "live for the moment loan"
Just make sure you're around to catch the foreclosures when they happen. We're in constant touch with the local banks to see what's happening.
The I/O loan is the "living beyond your means loan" or the "live for the moment loan"
Just make sure you're around to catch the foreclosures when they happen. We're in constant touch with the local banks to see what's happening.
10-16-2006, 10:01 AM
#595
Senior Moderator
There is already alot of good dicussion in the long running "official" real estate bubble thread.
https://acurazine.com/forums/showthread.php?t=302802
Short answer: no one knows, and opinions are like assholes.....
https://acurazine.com/forums/showthread.php?t=302802
Short answer: no one knows, and opinions are like assholes.....
10-18-2006, 06:38 PM
#596
Moderator Alumnus
The U.S. housing market has taken a bigger tumble than many analysts had expected, but some say the worst of the slide may be over and that low mortgage rates and rising incomes point to a better year in 2007.
While the number of unsold homes on the market is at an all-time high and prices have softened, favorable borrowing terms and a quickened pace of wage gains amid a tight labor market should coax buyers back and help sop up the excess stock, economists said.
http://today.reuters.com/news/articl..._reutersEdge-1 (full article)
10-18-2006, 06:44 PM
#597
is learning to moonwalk i
^^ Mortgage rates jumped about half a point this week. If they drop back down and even below 6% as the article suggests, I might be able to buy around their predicted "turning point"
10-23-2006, 06:02 PM
#599
I feel the need...
Housing Slump in U.S. Poised to Worsen, Derivatives Trades Show
I trust the capital markets more than surveys of realtors or home builders...
The slumping U.S. housing market is about to get a lot worse, according to traders of mortgage-backed securities and the so-called derivatives on which they are based.
http://www.bloomberg.com/apps/news?p...N68TM&refer=us
http://www.bloomberg.com/apps/news?p...N68TM&refer=us
