Why Housing Is About to Go "Pop!"

ax3816 · Post by **ax3816** » 27 Aug 2004 15:03

The $32 million house that wasn't
Even in Rancho Santa Fe, this one has Realtors abuzz
By Roger M. Showley
UNION-TRIBUNE STAFF WRITER

August 26, 2004

http://www.signonsandiego.com/news/feat ... ancho.html

In San Diego County's overheated housing market, it isn't every day that a buyer bargains down the price by 47 percent.

But that appears to be what happened with a year-old Rancho Santa Fe mansion that sold last week.

Listed in early March for $32 million, the 17,000-square-foot home sits on 8.4 acres in the Rancho del Lago gated community on the northwest side of the ranch.

If the property had sold for that amount, the estate easily would have taken the record as the most expensive residential transaction in the county.

But the sales price, based on the transfer-tax stamps on the county recorder's official document filed last week, was "only" $17 million.

The sale immediately sent a buzz through the real estate community, with many asking how a house valued at $32 million could command only $17 million?

Had the real estate bubble indeed burst? Or had the house been priced unrealistically from the beginning?

(continued)

ax3816 · Post by **ax3816** » 31 Aug 2004 22:43

Expert: Housing boom losing its foundation

Lew Goodkin says that high appreciation levels won't last under current market conditions - especially for condos.

By JUDY STARK, Times Staff Writer
Published August 28, 2004

http://www.sptimes.com/2004/08/28/Homes ... oom_.shtml

ORLANDO - The party isn't over yet, but real estate consultant Lew Goodkin worries that it will be, down the road.

"The conditions that have made this market strong are not going to last," Goodkin said at the Southeast Building Conference this month.

"This is the first time we've seen the conditions of the last several years: a weak economy, an absolutely booming housing market, high appreciation levels without quality employment growth."

Building permits and mortgage originations are expected to drop off in the next two years, he said, and the superheated pace of home appreciation will cool.

That will cause problems, he said, for those who took the equity out of their homes, assuming that appreciation would continue at today's high rates, and for those who financed their homes with adjustable-rate mortgages. "They're stretched, they could face higher interest rates. This is a great concern."

Goodkin, now based in Carmel Valley, Calif., focused his greatest concern on condominiums, where "we're seeing the highest level of speculative buying in the history of Florida." Those who buy condos intending to quickly resell them at a profit, Goodkin calls "the Sea World group - flippers." He recalled that his waiter at an Italian restaurant in California recently told him that he'd invested in three Florida condos. "How many condos can a waiter afford?" he asked.

What happens down the road when all those investors want to sell and reap their profits? "Why will someone buy a condo from you two years from now, when it costs more and interest rates are higher?" Goodkin asked.

His colleague at Goodkin Consulting in Miami, senior consultant Jack Winston, agreed. Investors represent 70 percent of the buyers of some condos in Miami. "That's a very significant percentage of the market, and there's going to be a day of reckoning. Two years down the road, who are you going to resell to? There could be a tremendous standing inventory. You need an end buyer."

Bubbles burst, Winston said, "when you can't get your anticipated price, irrespective of what you paid" for a unit. "When you can't carry it, when all you can do is break even, that's when you want to cut your losses."

Spec buying by investors "distorts the market and hurts future demand by driving prices up so high," Goodkin said.

A better economy diminishes demand for housing by raising interest rates, Goodkin said. On the other hand, that bad news for home buyers may be good news for retirees and others who live on investment income.

"Multiple purchases are the concern," he said. The demand is not being generated by people who will actually live in those units. "Unbridled optimism in the market can turn."

Kalifornian · Post by **Kalifornian** » 06 Sep 2004 08:09

From coast to coast and sea to shining sea

www.delawareonline.com/newsjournal/loca ... marke.html

wcco.com/localnews/local_story_224115855.html

www.thisismoney.com/20040822/mh81673.html

rismedia.com/index.php/article/articleview/7489/1/1/

www.businessweek.com/bwdaily/dnflash/au ... _db035.htm

ax3816 · Post by **ax3816** » 07 Sep 2004 19:03

"VB программисты за 60 дней" выпуска 2004 года

Hot Housing Market is Flooded with New Agents Chasing Deals in Washington

http://rismedia.com/index.php/article/a ... /7653/1/1/

By Kristina Shevory
The Seattle Times

RISMedia Sept. 7, 2004 (KRT) - When Debbie Woo became a real-estate agent three months ago, she wanted a new career that would give her time to take care of her 2-year-old daughter and money to help support her family.

Woo, 39, left her job as a communications and marketing manager four months ago because she was tired of the high-tech industry and wanted a job that was fun and flexible. Real estate sounded perfect.

But it hasn\'t been an easy as she thought.

\"It\'s frustrating because you\'re doing all this work and you\'re not making any money,\" said Woo, an agent with Lake & Co. in Seattle. \"I\'ve wondered if I have all the key ingredients to be successful and whether this will work out for me.\"

A lot of new agents are wondering the same thing. Washington\'s booming housing market is attracting thousands of people eager for a job or a career change. Yet the market for real-estate agents is getting increasingly crowded and sparking intense competition among agents eager for business.

Real estate, one of the bright spots in an otherwise sluggish economy, is attracting a wide mix of people eager to make a lot of money in the area\'s housing boom. This year, the number of real-estate agents in the state hit a seven-year high of 24,417 agents -- a 16.2 percent increase over last year. In King County, the number of agents rose 13.4 percent this year to 10,621 agents.

The ranks of new agents include former lawyers, doctors, dentists, retirees and even twenty-somethings who are disenchanted with their previous jobs and hungry to try something new.

\"They think they can make money,\" said Darryl Bradshaw, owner of Mykut Real Estate School in Lynnwood and Federal Way. \"And that\'s not always the case.\"

Real estate draws people hungry to quickly change careers or find a new job, partly because the pay seems attractive and partly because it is relatively easy to become an agent: It costs about $300 in license fees and requires completing a 60-hour class.

Enrollment in Bradshaw\'s pre-license real-estate classes has exploded in the past two years, from 30 people a month to 200. The school began offering the course on CD-ROM two years ago to reach more students in far-flung areas.

\"It\'s become a real joy to teach them,\" said Bradshaw, who says his students are better educated, more aggressive about learning and take notes -- a rarity in his 40 years of teaching.

Real-estate schools might be turning out new graduates every two weeks, but that doesn\'t mean they\'re getting jobs.

Some real-estate offices have stopped hiring. Some did the bulk of their hiring last year and earlier this year. In 2003, Windermere added four offices and 598 agents in Washington, but the company says it will continue hiring.

\"I\'ve stopped hiring new agents,\" said Lake & Co. owner Mike Skahen, who hired seven agents into his 90-agent office in the past year.

Woo, who moved to Seattle four months ago, became a real-estate agent in one of the tightest markets for new agents. Despite a sizzling market, fewer homes are on the market than a year ago, and there are not enough homes in many places to meet demand.

Woo has given herself a deadline for how long she\'ll tough it out in real estate, but she doesn\'t know what she\'ll do next if it doesn\'t work out.

\"I continually ask myself, \'Is this going to work out?\' \" Woo said. \"And I don\'t know the answer.\"

© 2004, The Seattle Times. Distributed by Knight Ridder/Tribune Business News.

ax3816 · Post by **ax3816** » 07 Sep 2004 19:05

Slowing Housing Market May Stir Inflation

http://www.reuters.com/financeNewsArtic ... ID=6152140

Sat Sep 4, 2004 11:23 PM ET
By Richard Leong

NEW YORK (Reuters) - As U.S. home purchases slow, an expected rise in demand for rentals will result in a spike in inflation, analysts say, citing studies showing housing costs have been under-reported by the government.

The concern about a sudden gain in inflation centers on how much the record low interest rates have fueled the housing market since the economy softened dramatically nearly four years ago and how the rental market has softened as a consequence of so much home buying.

The worry now is that as the economy regains its footing and rates rise to keep inflation in check, would-be home buyers will instead look in the rental market.

All these concerns relate to the government's broadest inflation gauge, the consumer price index, which some analysts say has understated the true cost of housing because it more closely analyzes rents as opposed to home purchase prices.

"It's clear to me that the reported CPI (housing) metric is artificially restrained," said Richard DeKaser, chief economist at National City Corp. in Cleveland, Ohio.

Housing costs -- a reflection of what the CPI survey refers to as "owners' equivalent rent," make up 25 percent of the CPI and are the index's biggest component.

But in the second quarter, home prices rose by 9.36 percent, or more than 3.5 times the 2.6 percent year-on-year increase of the CPI's owners' equivalent rent as of June 30, according to U.S. government data.

To complicate matters further, the rental-market bias of the government's CPI survey will haunt inflation forecasters in an entirely new way as greater demand starts pushing up rents.

In other words, as rising interest rates help cool the housing market and the rents start heating up, inflation, as measured by the CPI, will go from being understated to being overstated.

FED TAKE NOTE

On the surface, such talk about the CPI appears academic. But even modest variance in the CPI can have notable impact on the economy because the U.S. government adjusts Social Security and certain debt interest payments based on the CPI. Some wage contracts also tie salary increases to the CPI.

The CPI's "rental-equivalence" index gauges how much homeowners would charge themselves for living in their own homes.

Using this formula, CPI inflation was understated by more than 1 percentage point annually in 2002 and 2003, according to Joseph Carson, director of global economic research at AllianceBerstein in New York, in a study released last week.

Given this approach to gauge housing inflation, Carson worries that the Federal Reserve's current monetary policy may not be doing enough to contain inflation.

"Most seriously, in our view, it is resulting in the Federal Reserve holding interest rates too low for too long," he said in the report.

However, the core personal consumption expenditure (PCE) index, the Fed's preferred inflation measure, was unchanged in July versus June and was up 1.5 percent from a year ago -- a relatively tepid reading that might support the Fed's current policy of hiking rates in a "measured" way.

RENT REBOUND

Last week, government and industry data showed that sales of new homes and existing homes fell 6.4 percent and 2.9 percent, respectively, in July.

It is unclear how soon and how strongly rents will rebound, given the historically high level of apartment vacancies, analysts said. Some analysts fear that when rents do start rising, the CPI would be skewed, overstating inflation, rather understating it.

The latest CPI data for July show CPI owners' equivalent rent was running merely 2.5 percent higher than a year earlier, below the overall CPI inflation rate of 3.0 percent.

Average U.S. home prices were up 7.7 percent in the second quarter from the same quarter in 2003, according to the Office of Housing Enterprise Oversight.

The housing market has been stubbornly strong, even with the modest rise in mortgage rates this year. But this torrid pace of home appreciation cannot be sustained as mortgage rates rise, leading to fewer people eligible to borrow and buy homes, analysts caution.

"It's not likely to continue with rising interest rates. The affordability of homeownership diminishes," said National City Corp.'s DeKaser.

© Reuters 2004. All Rights Reserved.

Renegade · Post by **Renegade** » 07 Sep 2004 23:39

А у нас пока кризиса не видно. В нашей комьюнити за одни выходные были продано 2 дома. Для примера мой: площадь 1600, 3 будрума, новая кухня, новый туалет, я отремонтировал только 2 вернхних туалета и покрасил дом, цена пол года назад - 380. Сейчас: площадь 1154, 2 бедрума, махонькая кухня, нужен ремонт, хотя можно въехать и жить, но ремонт бы не помешал - в субботу ушел за 370К. Аналагичный моему стоит 415, даже без ремонтов - 35К прироста в цене за 5 месяцев :pain1:

- за что???????. В общем я полностью перестал понимать что происходит вокруг меня.

Kalifornian · Post by **Kalifornian** » 07 Sep 2004 23:51

Renegade wrote:А у нас пока кризиса не видно [...] В общем я полностью перестал понимать что происходит вокруг меня.

В моем zip code количество домов, таунхаусов на маркете все снижается, в начале лета было 150-160, а сейчас чуть больше 100.

алёша · Post by **алёша** » 08 Sep 2004 20:23

Kalifornian wrote:
Renegade wrote:А у нас пока кризиса не видно [...] В общем я полностью перестал понимать что происходит вокруг меня.

В моем zip code количество домов, таунхаусов на маркете все снижается, в начале лета было 150-160, а сейчас чуть больше 100.

что, никогда не слышали о сезонности этого рынка? Тогда открою страшную тайну (золотого ключика

) -весна - начало лета - пик сезона, многие продажи/покупки домов производятся таким образом, чтобы дети меняли школу в начале учебного года, а не в середине (тем более в переполненных округах, где регистрироваться нужно заранее).

Сравнивайте с тем что было год назад в это же время года, для корректности.

Nata Ivanova · Post by **Nata Ivanova** » 10 Sep 2004 02:03

http://www.huduser.org/periodicals/ushm ... C-04Q2.pdf

US Housing Market Conditions, Aug 2004

Provided by US Department of Housing and Urban Development

Kalifornian · Post by **Kalifornian** » 10 Sep 2004 06:43

алёша wrote:что, никогда не слышали о сезонности этого рынка? Тогда открою страшную тайну (золотого ключика ) -весна - начало лета - пик сезона, многие продажи/покупки домов производятся таким образом, чтобы дети меняли школу в начале учебного года, а не в середине (тем более в переполненных округах, где регистрироваться нужно заранее).

Сравнивайте с тем что было год назад в это же время года, для корректности.

А чего с прошлым годом сравнивать 100 домиков/таунхаусов на 50,000 населения думаю маловато будет

Kalifornian · Post by **Kalifornian** » 15 Sep 2004 01:02

L.A. County Home Prices Continue to Soar

Los Angeles County housing prices continued their more than yearlong run of double-digit increases last month, with the median price paid for all homes rising 20.4% to $407,000 from a year ago.

To be sure, the pace of appreciation has slowed from the peak reached earlier this year. Yet, August was the 14th consecutive month that the median home price in L.A. County was up at least 20% year over year, according to DataQuick Information Systems, the La Jolla-based firm that compiles the monthly results.

August also saw 10,710 sales of new and existing houses and condominiums. That made August the sixth straight month that more than 10,000 transactions occurred, indicating that even though the supply of homes on the market is expanding, demand is still high.

Taken together, the data points to a soft landing for Southern California's still-sizzling housing market.

"I know a lot of people seem to think that the market is, quote, turning," said John Karevoll, DataQuick's chief analyst. "But to me it looks like normal activity at this point in the real estate cycle."

The August median price was essentially flat from the month before, though the number of homes sold was down 7.3% from July's 11,549 and down nearly 10% from 11,874 last August.

"Everybody is watching the monthly numbers very carefully to see if indeed this is the point at which the housing market takes a dive," Karevoll said.

"So far, there are no indications of that."

While the August median price is off from the peak reached in June, when the Los Angeles County median surged 32.3% to a record $414,000, Karevoll said, "the market is still very strong."

Kalifornian · Post by **Kalifornian** » 21 Sep 2004 18:41

Housing construction in August surged to its highest level in five months, a dose of encouraging news for the economy’s expansion.

http://www.msnbc.msn.com/id/6062314

genka8 · Post by **genka8** » 24 Sep 2004 19:21

Эх, господа, ждем этого "Поп" с апреля, а где же он? Пока признаков не видно.

алёша · Post by **алёша** » 24 Sep 2004 22:16

genka8 wrote:Эх, господа, ждем этого "Поп" с апреля, а где же он? Пока признаков не видно.

так Вы не знаете, наверное : он всегда подкрадывается незаметно (а потом уже поздно).

ЗЫ вот как в апреле 2000 было, никто не верил, а он всё равно подкрался.

ax3816 · Post by **ax3816** » 25 Sep 2004 00:23

Так вроде уже давно в статьях говорилось, что "поп" ожидается в конце 2005 - начале 2006 года. Рано ещё :-)

.

Nwaylock · Post by **Nwaylock** » 26 Sep 2004 13:32

Смотрите по проценту, пока его сильно не подняли. Смотрите на ожидаемые сроки поднятия процента, это и должен быть по-идее именно тот момент.

OtecFedor · Post by **OtecFedor** » 27 Sep 2004 06:52

Разбери их, вот опять по СНН сказали что продажи домов в агусте не такие как надо и Волл Стрит на это плохо отреагировал. Правда, комментатор успокоил, что все ОК, на каждый картонный курятник претендует десять китайцев, каждый с чумоданом баксов, и пять индусов, у каждого по два чумадана. Почему правда с чумоданом-то баксов им в Китае жизнь не мила, не сказал...
Я так думаю попа если и будет, то с началом отопительного сезона. Эти цены на нефть и газ кого хош до сумы доведут.

A. Fig Lee · Post by **A. Fig Lee** » 09 Oct 2004 05:57

Ну че, колитесь - какой правильный ответ - Кирдык или нет?

Kalifornian · Post by **Kalifornian** » 11 Oct 2004 19:10

Время работает на Кирдык!

Ctrl-C · Post by **Ctrl-C** » 11 Oct 2004 19:13

Уже нынешнее поколение сове... американцев будет жить при ком... Кирдыке :umnik1:

Renegade · Post by **Renegade** » 11 Oct 2004 22:39

A. Fig Lee wrote:Ну че, колитесь - какой правильный ответ - Кирдык или нет?

Вы знаете, что даже если цены не рухнут, то сами по себе такие цены при неуспевающем росте з/п и есть кирдык. По сути дела происходит обеднение тех, кто не успел.

sergey1234 · Post by **sergey1234** » 11 Oct 2004 22:47

Renegade wrote:
A. Fig Lee wrote:Ну че, колитесь - какой правильный ответ - Кирдык или нет?

Вы знаете, что даже если цены не рухнут, то сами по себе такие цены при неуспевающем росте з/п и есть кирдык. По сути дела происходит обеднение тех, кто не успел.

Не так - процент по моргаджу низок. Раньше (когда покупали те, кто успел) процент был выше и не было интерест-онли моргаджей и всякиx "зиро даун".

Т.е. смотреть надо не на отношение цены дома к зарплате (в связи с ростом цен оно естественно поменялось) а на соотношение к зарплате месячныx выплат по моргаджу для семьи владеющей домом (т.е. реально выплачиваемыx семьей денег). А это соотношение "тогда" (скажем, 6-8 лет назад) и "сейчас" поменялось совсем не так сильно, а для интерест-онли моргаджа и вообще выплаты сейчас меньше чем было раньше за более дешевый дом с 20% даун и под 8% годовыx.

BOPOBYC · Post by **BOPOBYC** » 12 Oct 2004 17:49

Мне кажется, что оттого что в нескольких районах цены на дома через чур высокие кирдыка не будет. Потому что во-первых кирдык зависит не только от рынка недвижимости, во-вторых вышеописанных районов не так много, в-третьих все компенсируется районами где цены или не выросли совсем или выросли несильно, и ИМХО таких районов гораздо больше чем оверпрайсенных.

Кирпич · Post by **Кирпич** » 12 Oct 2004 18:40

sergey1234 wrote:Не так - процент по моргаджу низок. Раньше (когда покупали те, кто успел) процент был выше и не было интерест-онли моргаджей и всякиx "зиро даун".

Т.е. смотреть надо не на отношение цены дома к зарплате (в связи с ростом цен оно естественно поменялось) а на соотношение к зарплате месячныx выплат по моргаджу для семьи владеющей домом (т.е. реально выплачиваемыx семьей денег). А это соотношение "тогда" (скажем, 6-8 лет назад) и "сейчас" поменялось совсем не так сильно, а для интерест-онли моргаджа и вообще выплаты сейчас меньше чем было раньше за более дешевый дом с 20% даун и под 8% годовыx.

Но ведь когда-нибудь это халява кончиться, и надо будет выплачивать принципал, да и рейт на adjustable mortgages поднимиться повыше

Renegade · Post by **Renegade** » 12 Oct 2004 20:41

Кирпич wrote:Но ведь когда-нибудь это халява кончиться, и надо будет выплачивать принципал, да и рейт на adjustable mortgages поднимиться повыше

Да еще и таксы на такие дома астут - а это уже точно читый отьем денег у населения. Я во с плохими предсувствиями думаю что будет когда мой 5 АРМ фиксед станет совсем не фиксед через 4 года....