Is A Housing Bubble About To Burst?
As rising rates send mortgage payments higher, demand may cool
JULY 19, 2004
http://www.businessweek.com/magazine/co ... _mz011.htm
How crazy is real estate getting in parts of the country? Ask Sierra and Corbin Stewart, who just bought a modest, 2,000-square-foot house in Pleasanton, Calif., for $730,000. Mortgage and tax payments will consume 55% of their income, forcing them to do without extras such as cable TV. Says Sierra, a 29-year-old marketer: "The other night we were doing our budget, and we almost called the real estate agent and said we want to get out."
If 30-year fixed-rate mortgages rise just one percentage point, to 7.2% from their current 6.2% -- well within the range of forecasts -- house prices would have to fall 11% to keep new buyers' monthly mortgage payments from rising. If fixed rates went to 8%, prices would need to fall 20% to keep payments level.
Heavy mortgage borrowing since 2000 has enabled the housing market to dodge an iron law: House prices can't perpetually rise faster than incomes. For the past four years, they have. The ratio of house prices to median family income is a record 3.4, a figure that's 19% above the 1975-2000 average, according to data from the Office of Federal Housing Enterprise Oversight and the Census Bureau. As rates rise, a return to the long-term-average ratio would require housing prices to fall 19% -- or incomes to shoot up an implausible 24%.
Why Housing Is About to Go "Pop!"
Moderator: Komissar
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ax3816
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The housing bubble doesn't add up
Lots of people have been saying it over the past few years, but, just like stock prices, real estate prices will not go up forever. We can't all live in million-dollar houses.
By Bill Fleckenstein
Posted 6/28/2004
http://moneycentral.msn.com/content/P31581.asp
When the math does not work
We have seen drunken lending orgies in the past, and they always end in disaster. Just as the math hasn't worked for everyone to live in a super-expensive house, no matter their income, the math doesn't work in lending, either. That's two pieces of the housing market where the math just does not work.
Bubblenomics: A window into 'home' economics
Also, you can be very close to the end of some phenomenon that's completely and totally knowable, and you can look completely stupid as things get even wilder. Here�s another example: In October 1999, I gave what I think is probably the best speech that I will ever make in my life, �Spinning Financial Illusions: The Story of Bubblenomics.� (If you believe that the housing bubble will never end, I encourage you to read the speech and think about what it was like at that time -- when it seemed the stock mania would never end.)
My observations in 1999 about what was happening and what would ultimately happen were fairly accurate. That said, the Nasdaq ($COMPX) doubled in the five months after my speech, making me look like a complete and total idiot, when, in fact, I was essentially dead right. This happens all the time. Markets tend to make you look the silliest just before they're about to change.
My point in bringing this up is to lend some perspective to the lunacy in housing and the continued denial/semi-lunacy we see in equities. The Fed and the government have attempted to bail out the aftermath of our giant stock bubble with a leveraged real-estate bubble. This will end in disaster, guaranteed -- no ifs, ands, or buts about it -- though, to repeat, what we cannot know is the timing.
Lots of people have been saying it over the past few years, but, just like stock prices, real estate prices will not go up forever. We can't all live in million-dollar houses.
By Bill Fleckenstein
Posted 6/28/2004
http://moneycentral.msn.com/content/P31581.asp
When the math does not work
We have seen drunken lending orgies in the past, and they always end in disaster. Just as the math hasn't worked for everyone to live in a super-expensive house, no matter their income, the math doesn't work in lending, either. That's two pieces of the housing market where the math just does not work.
Bubblenomics: A window into 'home' economics
Also, you can be very close to the end of some phenomenon that's completely and totally knowable, and you can look completely stupid as things get even wilder. Here�s another example: In October 1999, I gave what I think is probably the best speech that I will ever make in my life, �Spinning Financial Illusions: The Story of Bubblenomics.� (If you believe that the housing bubble will never end, I encourage you to read the speech and think about what it was like at that time -- when it seemed the stock mania would never end.)
My observations in 1999 about what was happening and what would ultimately happen were fairly accurate. That said, the Nasdaq ($COMPX) doubled in the five months after my speech, making me look like a complete and total idiot, when, in fact, I was essentially dead right. This happens all the time. Markets tend to make you look the silliest just before they're about to change.
My point in bringing this up is to lend some perspective to the lunacy in housing and the continued denial/semi-lunacy we see in equities. The Fed and the government have attempted to bail out the aftermath of our giant stock bubble with a leveraged real-estate bubble. This will end in disaster, guaranteed -- no ifs, ands, or buts about it -- though, to repeat, what we cannot know is the timing.
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ax3816
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NY Fed: Housing Bubble? What Housing Bubble?
Tue Jun 22, 2004 03:05 PM ET
By Victoria Thieberger
NEW YORK (Reuters) - There is no bubble in national home prices, and even if regional house prices do fall that will not pose a threat to the overall U.S. economy, the New York Federal Reserve Bank said on Tuesday.
http://www.reuters.com/newsArticle.jhtm ... ID=5485522
Tue Jun 22, 2004 03:05 PM ET
By Victoria Thieberger
NEW YORK (Reuters) - There is no bubble in national home prices, and even if regional house prices do fall that will not pose a threat to the overall U.S. economy, the New York Federal Reserve Bank said on Tuesday.
http://www.reuters.com/newsArticle.jhtm ... ID=5485522
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ax3816
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HSBC, Unlike Fed, Sees Housing Bubble
Fri Jun 25, 2004 01:43 PM ET
By Victoria Thieberger
http://www.reuters.com/financeNewsArtic ... ID=5518002
NEW YORK (Reuters) - Economists at HSBC on Friday waded into the debate over whether the U.S. housing market is over-inflated, declaring a bubble exists, something the Federal Reserve has been reluctant to do.
Just a few days after the Federal Reserve Bank of New York said there was little evidence of a nationwide housing bubble, HSBC said a bubble exists and prices are likely to deflate gradually over a few years, triggered by Federal Reserve interest rate rises.
The debate over whether a housing bubble exists has raged in recent years as prices have surged. But the Federal Reserve has often said it does not see a bubble.
Over the four years to the first quarter of 2004, official figures show house prices rose 33 percent nationally. Over the same period, prices in Washington, D.C., were up 70 percent, in California 60 percent and in New York and Florida 50 percent.
Fri Jun 25, 2004 01:43 PM ET
By Victoria Thieberger
http://www.reuters.com/financeNewsArtic ... ID=5518002
NEW YORK (Reuters) - Economists at HSBC on Friday waded into the debate over whether the U.S. housing market is over-inflated, declaring a bubble exists, something the Federal Reserve has been reluctant to do.
Just a few days after the Federal Reserve Bank of New York said there was little evidence of a nationwide housing bubble, HSBC said a bubble exists and prices are likely to deflate gradually over a few years, triggered by Federal Reserve interest rate rises.
The debate over whether a housing bubble exists has raged in recent years as prices have surged. But the Federal Reserve has often said it does not see a bubble.
Over the four years to the first quarter of 2004, official figures show house prices rose 33 percent nationally. Over the same period, prices in Washington, D.C., were up 70 percent, in California 60 percent and in New York and Florida 50 percent.
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ax3816
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Home-price growth seen slowest since '70s
Fed estimates only 2.6 percent rise over next 3 years
The Associated Press
Updated: 11:27 a.m. ET July 14, 2004
http://www.msnbc.msn.com/id/5435721
WASHINGTON - U.S. house prices are likely to grow at the slowest pace in more than three decades as interest rates climb and land prices take a tumble over the next three years, researchers at the Federal Reserve have estimated in a new study.
U.S. mortgage applications fall
Reduced demand seen in holiday-shortened week
REUTERS
Updated: 9:18 a.m. ET July 14, 2004
http://www.msnbc.msn.com/id/5435730/
WASHINGTON - New applications for U.S. mortgages fell for the week ending July 9, under pressure from lower demand for floating-rate home loans and reduced business activity during a holiday-shortened week, an industry group said on Wednesday.
Fed estimates only 2.6 percent rise over next 3 years
The Associated Press
Updated: 11:27 a.m. ET July 14, 2004
http://www.msnbc.msn.com/id/5435721
WASHINGTON - U.S. house prices are likely to grow at the slowest pace in more than three decades as interest rates climb and land prices take a tumble over the next three years, researchers at the Federal Reserve have estimated in a new study.
U.S. mortgage applications fall
Reduced demand seen in holiday-shortened week
REUTERS
Updated: 9:18 a.m. ET July 14, 2004
http://www.msnbc.msn.com/id/5435730/
WASHINGTON - New applications for U.S. mortgages fell for the week ending July 9, under pressure from lower demand for floating-rate home loans and reduced business activity during a holiday-shortened week, an industry group said on Wednesday.
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ax3816
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When is a recession not a recession? Why are interest rates so low?
And who is Fannie Mae? MSNBC.com wants to answer your questions. By John W. Schoen
MSNBC
Updated: 2:44 p.m. ET July 09
http://www.msnbc.msn.com/id/3403854/
BUY OR WAIT?
With the rates climbing, my husband and I find ourselves at a crossroads. We live in very expensive Sonoma County, which we love and would like to stay. We make above middle income for the area and our total debt is approximately 40 percent of our annual gross income.
My question is should we get into the housing market now, (we will have to do 100 percent financing and a 2-year interest only mortgage to get into a $400k + home) or do we wait a year or two and try to sock more aside for a down payment as interest rates start to climb and do a 30-year fixed at that time? Currently the median house price for Southern California $460k and still climbing, with condos going from $299k to $480k!
We have been told that even if the rest of the country's house buying frenzy slows that Southern California will continue and prices here will continue to rise because of this desirable area.
What to do?!
Annika G. -- Sonoma County, Calif.
Let me guess: The source of the "home prices will continue to rise" forecast wouldn't happen to be a real estate agent, would it?
In fact, it's anybody's guess what will happen to home prices. Some people argue that the recent rapid run-up in prices — especially in red hot markets like California — is a sign there's a housing "bubble" ready to burst. (My personal opinion is that, while prices may ease or drop slightly, a "crash" in housing prices is unlikely.)
But there's a good argument to be made that if mortgage rates rise significantly, home prices will be hurt. Higher rates give buyers less buying power, reducing the number of people who would want to buy your house and cutting the price they're able to pay.
The risk of buying now with 100 percent financing is that you may be buying at peak prices — if home prices fall, you'll owe more than you own. And that 2-year, interest-only loan will eventually have to be converted into a longer-term mortgage. So even if you buy now, you still won't be able to lock in a low rate for the long haul.
Yes, housing prices may continue to rise. But the real question is how much house you can comfortably afford and how much risk you feel comfortable with. Buying with 100 percent financing (no matter when you do so) is riskier than waiting and coming up with a down payment. The risk of buying later is that prices have gone up, but no one can accurately forecast whether house prices will go up or down from here
And who is Fannie Mae? MSNBC.com wants to answer your questions. By John W. Schoen
MSNBC
Updated: 2:44 p.m. ET July 09
http://www.msnbc.msn.com/id/3403854/
BUY OR WAIT?
With the rates climbing, my husband and I find ourselves at a crossroads. We live in very expensive Sonoma County, which we love and would like to stay. We make above middle income for the area and our total debt is approximately 40 percent of our annual gross income.
My question is should we get into the housing market now, (we will have to do 100 percent financing and a 2-year interest only mortgage to get into a $400k + home) or do we wait a year or two and try to sock more aside for a down payment as interest rates start to climb and do a 30-year fixed at that time? Currently the median house price for Southern California $460k and still climbing, with condos going from $299k to $480k!
We have been told that even if the rest of the country's house buying frenzy slows that Southern California will continue and prices here will continue to rise because of this desirable area.
What to do?!
Annika G. -- Sonoma County, Calif.
Let me guess: The source of the "home prices will continue to rise" forecast wouldn't happen to be a real estate agent, would it?
In fact, it's anybody's guess what will happen to home prices. Some people argue that the recent rapid run-up in prices — especially in red hot markets like California — is a sign there's a housing "bubble" ready to burst. (My personal opinion is that, while prices may ease or drop slightly, a "crash" in housing prices is unlikely.)
But there's a good argument to be made that if mortgage rates rise significantly, home prices will be hurt. Higher rates give buyers less buying power, reducing the number of people who would want to buy your house and cutting the price they're able to pay.
The risk of buying now with 100 percent financing is that you may be buying at peak prices — if home prices fall, you'll owe more than you own. And that 2-year, interest-only loan will eventually have to be converted into a longer-term mortgage. So even if you buy now, you still won't be able to lock in a low rate for the long haul.
Yes, housing prices may continue to rise. But the real question is how much house you can comfortably afford and how much risk you feel comfortable with. Buying with 100 percent financing (no matter when you do so) is riskier than waiting and coming up with a down payment. The risk of buying later is that prices have gone up, but no one can accurately forecast whether house prices will go up or down from here
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Mic
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Kalifornian
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ax3816
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Mic wrote:ax3816 - Thank you very much!
За что?
За то что поднимаю панику и вгоняю массы в депрессию? 
А если серьёзно, то просто пытаюсь отследить общее настроение в прессе. Да, пресса умеет и любит манипулировать общественным мнением, но иногда среди этой болтовни можно выловить несколько фактов. А факты, как извесно, вещь упрямая. Пока получается что на одно "солнечное" сообщение от реалторов, что цены будут продолжать расти, попадает пять "мрачных" сообщений что всё скоро навернётся.
Но не надо забывать, что та-же самая пресса, которая предрекает кирдык в 2005-06 годах, в 1998-2000 годах предрекала светлое будущее связаное с IT. Так что, читаем и думаем САМИ.
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Mic
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ax3816 wrote:За что?
Да нет, за то, что делаете то, что сам бы хотел сделать, да руки не доходят
ax3816 wrote:Но не надо забывать, что та-же самая пресса, которая предрекает кирдык в 2005-06 годах, в 1998-2000 годах предрекала светлое будущее связаное с IT. Так что, читаем и думаем САМИ.
Абсолютно такое же мнение! Полная аналогия с дот-комами.
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ax3816
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Mic wrote:ax3816 wrote:За что?
Да нет, за то, что делаете то, что сам бы хотел сделать, да руки не доходят
Пажалуста
Я уже хотел прекратить это дело, но раз вижу, что есть хоть один "читатель" моих ссылок, то пока ещё продолжу 
.
[ax3816 : правка №2, удалил ссылку на ещё один сайт, поскольку в разделе Current News были статьи годовалой давности - нам такое не надо]
[ax3816 : правка №1, я удалил ссылку, которая была здесь, поскольку она годовалой давности]
Economy Paused, Wholesale Prices Drop
July 15, 2004 12:02:00 PM ET
By Alister Bull
http://news.moneycentral.msn.com/breaki ... ID=3888471
United States Bunkrupsy Rates
http://moneycentral.msn.com/content/Com ... l=bankrupt
Last edited by ax3816 on 15 Jul 2004 18:34, edited 2 times in total.
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dima_ca
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ax3816 wrote:
Real Estate Bubble Theory Shows More Evidence
by John Wasik
http://quote.bloomberg.com/apps/news?pi ... 9ui2A3TsDg
July 28 (Bloomberg) -- When it's sweltering, you seek a cool place. When it
July 28 what year??
Безапелляционность - признак глупости.
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ax3816
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dima_ca wrote:ax3816 wrote:
Real Estate Bubble Theory Shows More Evidence
by John Wasik
http://quote.bloomberg.com/apps/news?pi ... 9ui2A3TsDg
July 28 (Bloomberg) -- When it's sweltering, you seek a cool place. When it
July 28 what year??
Whoops... Проморгал год. Обычно год пишется в самом начале статьи, а в этой не было и не смекнул, что в этом году July 28 ещё не было
В конце этой статьи стоит "Last Updated: July 28, 2003 00:19 EDT"... Так что
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Nwaylock
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NskCA
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Для любителей gloomy news in general вот подходящая подборка:
www.fiendbear.com/
www.fiendbear.com/
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Kalifornian
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ax3816 wrote:Home-price growth seen slowest since '70s
Fed estimates only 2.6 percent rise over next 3 years
The Associated Press
Updated: 11:27 a.m. ET July 14, 2004
http://www.msnbc.msn.com/id/5435721
WASHINGTON - U.S. house prices are likely to grow at the slowest pace in more than three decades as interest rates climb and land prices take a tumble over the next three years, researchers at the Federal Reserve have estimated in a new study.
Глядя на это сообщение видим, что лопания пузыря не будет
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ax3816
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Kalifornian wrote:ax3816 wrote:Home-price growth seen slowest since '70s
Fed estimates only 2.6 percent rise over next 3 years
The Associated Press
Updated: 11:27 a.m. ET July 14, 2004
http://www.msnbc.msn.com/id/5435721
WASHINGTON - U.S. house prices are likely to grow at the slowest pace in more than three decades as interest rates climb and land prices take a tumble over the next three years, researchers at the Federal Reserve have estimated in a new study.
Глядя на это сообщение видим, что лопания пузыря не будет
А это ещё не известно. В статье сказано где были взяты цифры для анализа, но не сказано какие именно "параметры" они анализировали и каковы были критерии для принятия заключения.
The Fed researchers said they studied the question by using data from government-sponsored mortgage giant Freddie Mac, the Census Bureau and the Bureau of Economic Analysis to construct a quality-adjusted price index for the stock of residential land in the United States.
Также, в статье говорится, что
They found the formula they developed would have broadly predicted the actual changes in the market values of homes recorded in Census data over the last 20 years.
Если учесть что такого низкого процента по моргичу не было лет 40 и подобных условий для выдачи кредита (100%, no money down) тоже давненько не припоминают, то все эти выведенные формулы не внушают доверия ибо мало кто с таким не сталкивался и последствия этих событий непредсказуемы.
Возвращаясь к статье
U.S. house prices are likely to grow at the slowest pace in more than three decades as interest rates climb and land prices take a tumble over the next three years, researchers at the Federal Reserve have estimated in a new study.
С тем, что в течении последующих 3-х лет обвала не будет, еще кое-как можно согласиться - есть вероятность что люди смогут платить за дома в течении 3-х лет. Но вот если заглянуть чуть подальше, когда срок 3-х и 5-ти летние ARM--ов подойдёт к концу и люди столкнутся с дилемой перефинансирования огромной суммы под значительно больший процент - то у меня это вызывает большие опасения. По крайней мере положительных прогнозов на 5-7 лет я пока ещё нигде не встречал.
Ко всем прогнозам, если они не публикуют исходные данные и говорят как они "крамсали" данные, нужно относиться скептически. Например, в вышеуказаном прогнозе не сказано, каков процент людей купили дома как primary residence, а каков - из спекулятивных соображений. Если судить по area где я живу, то в ней значительная часть людей купили по нескольку домов чисто как investement, и как только наметится обратная тенденция, они начнут от них избавляться чтобы максимизировать свой ROI (return on investment), что неминуемо понизит стоимость домов.
Так что поживём-увидим.
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Kalifornian
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У антиподов дела уже плохи
A graph of preliminary monthly data in the Reserve's Bank's bulletin, from Australian Property Monitors, suggested Sydney median house prices have fallen about $60,000 to $450,000 this year, down 12 per cent
http://www.smh.com.au/articles/2004/07/ ... 91569.html
A graph of preliminary monthly data in the Reserve's Bank's bulletin, from Australian Property Monitors, suggested Sydney median house prices have fallen about $60,000 to $450,000 this year, down 12 per cent
http://www.smh.com.au/articles/2004/07/ ... 91569.html
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ax3816
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Я заметил, что некоторые линки перестают работать на сайтах переодических изданий, поэтому, если статьи будут не большими, я буду их постить целиком.
Rising rates an election-year reality
Housing market should expect some pain
Wednesday, July 14, 2004
By Tom Kelly
Inman News
http://www.mortgage101.com/partner-scri ... p?ID=42023
The numberof presidential television advertisements seems to be overwhelming for May andJune. The election still is in November, isn't it?
Perhaps thecandidates feel there are more negatives in the mix this year so an earlierdamage-control campaign is in order. One factor is that mortgage interest ratesstand a very good chance of going up a tick, contrary to the popular perceptionof election year rate movements.
Most realestate analysts and economists say home loan rates could be a full percentagepoint higher (rising from approximately 6 percent to 7 percent) by the end of2004.
"Thenumber is going to be higher than what we've been used to the past fewyears," said John Tuccillo, former chief economist for the NationalAssociation of Realtors and now a housing consultant and author. "It'salso going to bring a little pain to the housing market."
Inreality, for the past 40 years, the chances of interest rates declining duringa presidential election year have been poor. While there are fluctuationsdepending on the type of loan, the terms and the month the loan was written,the truth is that mortgage rates tend to go up more often than they go downduring presidential election years.
ThomasFrench, former president of the Mortgage Bankers Association of America and aman who steers clear of unclear, middle-of-the-road statements, told me beforethe 1988 election: "I don't think anything as puny as a political party orcandidate can move mortgage rates in this world. They may hope, but it won'thappen."
SungWon Sohn, executive vice president and chief economic officer for Wells FargoBank, once worked with Federal Reserve Chairman Alan Greenspan and was a senioreconomist on the President's Council of Economic Advisors. Sohn is very awareGreenspan will not want his legacy to be that of higher interest rates duringhis final years as chairman.Greenspan recently completed hisfourth, four-year term as chairman and originally took office to fill anunexpired term as a member of the board in 1987.
In thelast 10 presidential election years, the interest rates tied to the 10-yearTreasury-bond rate went up seven times and dropped three times (by less than ahalf-percentage-point). For example, last year at this time the 10-yearTreasury bond was at 3.2 percent, while it's been hovering at 4.8 percent thepast 30 days. Although rates are historically low, they are definitely higherthan a year ago.
"Ithink there are not a lot of wild cards we can look at domestically that aregoing to bring rates back down," Tuccillo said. "However,internationally there are two. The first piece is the price of oil. It'sfeeding into the inflation that we are feeling not just at the pump but intaxi fares, long distance shipping charges, airline tickets and then eventuallyinto manufacturing components.
"Theother big wild card is the Chinese economy. One of the big reasons we areseeing the pressure on commodities is the demand by the Chinese because theyare growing so fast."
Accordingto Tuccillo, if the Chinese economy slows down and if we can somehow convincethe oil producing countries to reduce the price of oil, then we could get backto an interest rate level we've seen the past couple of years. Other than thosetwo wild cards, there isn't much out there that is going to bring interestrates back down.
Most homeloans are now sold as long-term securities on the international market to avariety of investors. They, not local bankers, now control long-term interestrates. In a capsule, things are so much more complex and different today. Localbankers no longer dominate the financial landscapes they serve. For example,years ago when the corner banker had plenty of cash in deposits, he typicallylent money at a cheaper rate. Now, there's a definite international influence.
If theSaudis decide to hold down the price of oil, it will affect what you pay at thepumpand probably what you pay for a home mortgage. This move typically hasnothing to do with a specific political party in the United States. Even theFederal Reserve Board doesn't have the long-term power to keep rates down likeit once did. It does react to harness and stimulate the economy as it sees fit,but other countries now have to cooperate.
Lately,it's been difficult obtaining cooperation.
TomKelly is a syndicated columnist and talk show host. He can be reached at news@tomkelly.com.
Rising rates an election-year reality
Housing market should expect some pain
Wednesday, July 14, 2004
By Tom Kelly
Inman News
http://www.mortgage101.com/partner-scri ... p?ID=42023
The numberof presidential television advertisements seems to be overwhelming for May andJune. The election still is in November, isn't it?
Perhaps thecandidates feel there are more negatives in the mix this year so an earlierdamage-control campaign is in order. One factor is that mortgage interest ratesstand a very good chance of going up a tick, contrary to the popular perceptionof election year rate movements.
Most realestate analysts and economists say home loan rates could be a full percentagepoint higher (rising from approximately 6 percent to 7 percent) by the end of2004.
"Thenumber is going to be higher than what we've been used to the past fewyears," said John Tuccillo, former chief economist for the NationalAssociation of Realtors and now a housing consultant and author. "It'salso going to bring a little pain to the housing market."
Inreality, for the past 40 years, the chances of interest rates declining duringa presidential election year have been poor. While there are fluctuationsdepending on the type of loan, the terms and the month the loan was written,the truth is that mortgage rates tend to go up more often than they go downduring presidential election years.
ThomasFrench, former president of the Mortgage Bankers Association of America and aman who steers clear of unclear, middle-of-the-road statements, told me beforethe 1988 election: "I don't think anything as puny as a political party orcandidate can move mortgage rates in this world. They may hope, but it won'thappen."
SungWon Sohn, executive vice president and chief economic officer for Wells FargoBank, once worked with Federal Reserve Chairman Alan Greenspan and was a senioreconomist on the President's Council of Economic Advisors. Sohn is very awareGreenspan will not want his legacy to be that of higher interest rates duringhis final years as chairman.Greenspan recently completed hisfourth, four-year term as chairman and originally took office to fill anunexpired term as a member of the board in 1987.
In thelast 10 presidential election years, the interest rates tied to the 10-yearTreasury-bond rate went up seven times and dropped three times (by less than ahalf-percentage-point). For example, last year at this time the 10-yearTreasury bond was at 3.2 percent, while it's been hovering at 4.8 percent thepast 30 days. Although rates are historically low, they are definitely higherthan a year ago.
"Ithink there are not a lot of wild cards we can look at domestically that aregoing to bring rates back down," Tuccillo said. "However,internationally there are two. The first piece is the price of oil. It'sfeeding into the inflation that we are feeling not just at the pump but intaxi fares, long distance shipping charges, airline tickets and then eventuallyinto manufacturing components.
"Theother big wild card is the Chinese economy. One of the big reasons we areseeing the pressure on commodities is the demand by the Chinese because theyare growing so fast."
Accordingto Tuccillo, if the Chinese economy slows down and if we can somehow convincethe oil producing countries to reduce the price of oil, then we could get backto an interest rate level we've seen the past couple of years. Other than thosetwo wild cards, there isn't much out there that is going to bring interestrates back down.
Most homeloans are now sold as long-term securities on the international market to avariety of investors. They, not local bankers, now control long-term interestrates. In a capsule, things are so much more complex and different today. Localbankers no longer dominate the financial landscapes they serve. For example,years ago when the corner banker had plenty of cash in deposits, he typicallylent money at a cheaper rate. Now, there's a definite international influence.
If theSaudis decide to hold down the price of oil, it will affect what you pay at thepumpand probably what you pay for a home mortgage. This move typically hasnothing to do with a specific political party in the United States. Even theFederal Reserve Board doesn't have the long-term power to keep rates down likeit once did. It does react to harness and stimulate the economy as it sees fit,but other countries now have to cooperate.
Lately,it's been difficult obtaining cooperation.
TomKelly is a syndicated columnist and talk show host. He can be reached at news@tomkelly.com.
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ax3816
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Интересная статейка о цикличности рынка недвижимости в Новой Зеландии. К нам это может быть не применимо, но ради интереса прочитать можно.
The Real Estate Market Has Peaked
Friday, 16 July 2004, 10:16 am
Press Release: Charles Drace
http://www.scoop.co.nz/mason/stories/BU0407/S00172.htm
The Real Estate Market Has Peaked
Studies of real estate cycles show property prices go up in the first four stages of the cycle, go flat in step #5, then go down for four stages, says investment consultant Charles Drace, author of “How to Survive the New Zealand Residential Property Crash”.
We are in stage #6 now. Therefore, anyone buying a property now must expect it to go down in value over stages six to nine.
Historically, real estate values in New Zealand go down 20% to 40% in inflation-adjusted terms during stagess six to nine.
Contact: Charles Drace, CFP Certified Financial Planner PO BOx 3833, charles@cdrace.co.nz http://www.satori.cc
Theory of the Property Cycleresearch by Henry George, Fred Foldway, and Charles Drace
1. Population growth and commercial growth at the early stage of the economic cycle, often supported by government encouragement/ low interest rates, creates an increase in the demand for housing and commercial buildings in excess of current supply.
2. It takes time for construction to gear up. This construction increases demand for vacant land. Bank loans are attracted to construction and real estate sales as prices begin to rise.
3. As vacant land prices rise a boom in land develops, leading to sub-divisions and speculative resale.
4. The real estate cycle peak is characterised by a high volume of subdivision and sales.
5. Construction catches up with demand and a small surplus is created. Rents can’t go up enough to support the higher property costs, making new construction and rental property investment unprofitable. Land values start to adjust downwards, the bubble is broken.
6. Rising interest rates hurt confidence and profits, adding to the downwards pressure on prices. Real estate enters a ‘hanging’ slow phase. Asking prices stay high but there are few buyers. Building, subdivisions, and speculation drops quickly. Sometimes a panic or crash begins at this point; often the market just slowly dies. Many keep speculating during this phase as they’re unaware of the market having turned.
7. Real estate starts to get marked down in price. This tends to take quite a while as owners tend to cling to mortgaged property longer than they would to other assets, like shares. Foreclosures rise but the foreclosure process is not quick.
8. Mortgage costs/interest rates are higher, rents decline, and vacancies increase. The market is dying rapidly. Foreclosures increase; speculators and investors are forced to sell as the capital value of their property decreases below lending margins and rents decrease below holding costs.
9. The bottom of the market has the following characteristics: high vacancies, low construction rates, foreclosures and no speculation. Debt must be written off and properties sell at a deep discount. Only those who entered stage 6 with little or no debt survive to buy the dramatically discounted properties.
Note: leverage/borrowing is advantageous during stages 1 to 4. Mortgages should be paid off during stages 5 and 6. Cash/excess collateral should be carried forward to stage 9, then used to buy discounted properties. This use of leverage only in stages 1 to 5 characterises the professional property investor; high mortgage exposure past stage 5 characterises the amateur who loses to the professional.
Copyright (c) Scoop Media
The Real Estate Market Has Peaked
Friday, 16 July 2004, 10:16 am
Press Release: Charles Drace
http://www.scoop.co.nz/mason/stories/BU0407/S00172.htm
The Real Estate Market Has Peaked
Studies of real estate cycles show property prices go up in the first four stages of the cycle, go flat in step #5, then go down for four stages, says investment consultant Charles Drace, author of “How to Survive the New Zealand Residential Property Crash”.
We are in stage #6 now. Therefore, anyone buying a property now must expect it to go down in value over stages six to nine.
Historically, real estate values in New Zealand go down 20% to 40% in inflation-adjusted terms during stagess six to nine.
Contact: Charles Drace, CFP Certified Financial Planner PO BOx 3833, charles@cdrace.co.nz http://www.satori.cc
Theory of the Property Cycleresearch by Henry George, Fred Foldway, and Charles Drace
1. Population growth and commercial growth at the early stage of the economic cycle, often supported by government encouragement/ low interest rates, creates an increase in the demand for housing and commercial buildings in excess of current supply.
2. It takes time for construction to gear up. This construction increases demand for vacant land. Bank loans are attracted to construction and real estate sales as prices begin to rise.
3. As vacant land prices rise a boom in land develops, leading to sub-divisions and speculative resale.
4. The real estate cycle peak is characterised by a high volume of subdivision and sales.
5. Construction catches up with demand and a small surplus is created. Rents can’t go up enough to support the higher property costs, making new construction and rental property investment unprofitable. Land values start to adjust downwards, the bubble is broken.
6. Rising interest rates hurt confidence and profits, adding to the downwards pressure on prices. Real estate enters a ‘hanging’ slow phase. Asking prices stay high but there are few buyers. Building, subdivisions, and speculation drops quickly. Sometimes a panic or crash begins at this point; often the market just slowly dies. Many keep speculating during this phase as they’re unaware of the market having turned.
7. Real estate starts to get marked down in price. This tends to take quite a while as owners tend to cling to mortgaged property longer than they would to other assets, like shares. Foreclosures rise but the foreclosure process is not quick.
8. Mortgage costs/interest rates are higher, rents decline, and vacancies increase. The market is dying rapidly. Foreclosures increase; speculators and investors are forced to sell as the capital value of their property decreases below lending margins and rents decrease below holding costs.
9. The bottom of the market has the following characteristics: high vacancies, low construction rates, foreclosures and no speculation. Debt must be written off and properties sell at a deep discount. Only those who entered stage 6 with little or no debt survive to buy the dramatically discounted properties.
Note: leverage/borrowing is advantageous during stages 1 to 4. Mortgages should be paid off during stages 5 and 6. Cash/excess collateral should be carried forward to stage 9, then used to buy discounted properties. This use of leverage only in stages 1 to 5 characterises the professional property investor; high mortgage exposure past stage 5 characterises the amateur who loses to the professional.
Copyright (c) Scoop Media
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Kalifornian
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Googlers are coming!!!
http://www.mercurynews.com/mld/mercuryn ... 165019.htm
Virginia Dickson had to decide whether to bid on a half-million-dollar house in Menlo Park or keep hunting, and she had more to worry about than just rising interest rates and a tight housing market.
There were also the Googlers -- the employees of Google -- who are poised to get rich by cashing in when the Mountain View search company sells its stock to the public soon.
The prospect of 200 new millionaires and hundreds more with lesser riches from the company's initial stock sale has injected fresh drama into the already tricky game of buying and selling a home in Silicon Valley.
Realtors, home buyers and sellers and even economists suspect Google's newly rich could drive demand and prices even higher, especially for million-dollar-plus homes in pricey locales like Palo Alto, Menlo Park and Los Altos. That has some buyers anxious that they won't be able to compete against Googlers, and some sellers holding out for higher prices.
Real estate experts say rich Google employees probably won't have a big impact in all areas of the housing market, but specific homes or neighborhoods might see a lot more bids.
Dickson -- whose two-bedroom home was priced at a mere $525,000 -- nonetheless feared the Google crowd might push all the half-million-dollar homes in Palo Alto, Menlo Park or Mountain View completely out of her reach.
So she rushed in a bid and got the home. ``I realized that if I wanted a house in this area, I would probably be better off to do it now,'' said Dickson, market-development director at document-retention company PSS Systems in Palo Alto.
Google employees stand to make their millions from the company's pending sale of stock, as they become eligible to sell low-priced stock options at the stock's new market value. The initial public offering, or IPO, is expected to come later this summer or early fall.
The actual number of eventual Google millionaires isn't publicly known. But some financial consultants working with Google clients estimate that 200 or so employees could see gains of at least $1 million when they cash in their stock options. Of course, no one knows what the stock price will do following the company's IPO.
An influx of millionaire Google home-buyers could put upward pressure on home prices in some areas, said Hans Johnson, who studies housing for the Public Policy Institute of California. Just how much depends on how many houses are listed at the time the new millionaires hit the streets, and how many of them there are.
``This event could have a short-term, localized impact,'' said Johnson.
This week there were about 275 homes priced between $1.5 million and $2.5 million for sale in northwestern Santa Clara County plus Woodside, Portola Valley and Menlo Park, according to the Multiple Listing Service. Agents interviewed said those are the areas and the price ranges that most potential buyers enriched by Google stock would consider.
Even if 200 potential buyers were chasing those homes at once, experts say, it probably wouldn't lift the entire market. But certain homes or areas might see far more bidders.
And some sellers are keeping that in mind.
Manuel Diaz, a retired Hewlett Packard executive, has his five-bedroom Los Altos Hills home for sale at $2,458,000. He thinks the presence of Google buyers could help the market for high-end homes by spurring people who've been on the sidelines to house-hunt soon.
``I don't think I will have to barricade myself right after the IPO because there will be 20 people at my door,'' said Diaz. ``But I think it will be helpful.''
``There's great potential for positive impact,'' agreed Pam Blackman, Diaz's agent with Intero Real Estate Services.
Certainly, no one is expecting a repeat of the dot-com madness, when buyers armed with stock-option wealth frequently bid hundreds of thousands over asking prices to get the homes they wanted.
``Those folks treated it like monopoly money,'' said Jim Nappo, an agent with Alain Pinel Realtors in Los Altos. These days ``everyone is a bit sobered from what happened in the dot-com bubble.''
Hard data on a burgeoning Google effect is elusive. But anecdotal evidence suggests that, at least psychologically, it's starting.
• In the pricey towns of Los Altos and Los Altos Hills, three of Gary Herbert's clients bought homes for between $1.5 million and $2.5 million in the last year, partly to beat the Googlers to the punch. Their thinking was `` `I am going to do it now before I'm competing with all these Google people with free money,' '' said Herbert, who heads Gary R. Herbert Real Estate Services.
• One of Nappo's clients tried to buy a $4.5 million home in Los Altos for $4 million. But the seller held out for full price, citing Google's pending IPO as one reason for his optimism.
• In some cases, mortgage companies are loosening their rules to lend to Google employees who might not be cash-rich now, but soon could be. Ahmad Ghavi, a mortgage broker with Washington Mutual in Palo Alto, said he helped one Google employee with a good credit history get a loan for a house worth about $3 million, with a down payment of only about $600,000 -- or 20 percent -- rather than the 35 percent that would normally be required for a home of that size.
``Now that the company might be going public soon, we have pre-approved them, and extended our underwriting criteria a bit,'' said Ghavi.
• Googlers have been trolling open houses in Los Altos, Palo Alto and Menlo Park, agents say.
``I've seen people come in with smiles on their faces. You can tell they're Google people,'' said Nappo. ``They say they're going to be in position to be looking at upscale houses within a six-month time frame. They're now getting an idea of what the market consists of.''
http://www.mercurynews.com/mld/mercuryn ... 165019.htm
Virginia Dickson had to decide whether to bid on a half-million-dollar house in Menlo Park or keep hunting, and she had more to worry about than just rising interest rates and a tight housing market.
There were also the Googlers -- the employees of Google -- who are poised to get rich by cashing in when the Mountain View search company sells its stock to the public soon.
The prospect of 200 new millionaires and hundreds more with lesser riches from the company's initial stock sale has injected fresh drama into the already tricky game of buying and selling a home in Silicon Valley.
Realtors, home buyers and sellers and even economists suspect Google's newly rich could drive demand and prices even higher, especially for million-dollar-plus homes in pricey locales like Palo Alto, Menlo Park and Los Altos. That has some buyers anxious that they won't be able to compete against Googlers, and some sellers holding out for higher prices.
Real estate experts say rich Google employees probably won't have a big impact in all areas of the housing market, but specific homes or neighborhoods might see a lot more bids.
Dickson -- whose two-bedroom home was priced at a mere $525,000 -- nonetheless feared the Google crowd might push all the half-million-dollar homes in Palo Alto, Menlo Park or Mountain View completely out of her reach.
So she rushed in a bid and got the home. ``I realized that if I wanted a house in this area, I would probably be better off to do it now,'' said Dickson, market-development director at document-retention company PSS Systems in Palo Alto.
Google employees stand to make their millions from the company's pending sale of stock, as they become eligible to sell low-priced stock options at the stock's new market value. The initial public offering, or IPO, is expected to come later this summer or early fall.
The actual number of eventual Google millionaires isn't publicly known. But some financial consultants working with Google clients estimate that 200 or so employees could see gains of at least $1 million when they cash in their stock options. Of course, no one knows what the stock price will do following the company's IPO.
An influx of millionaire Google home-buyers could put upward pressure on home prices in some areas, said Hans Johnson, who studies housing for the Public Policy Institute of California. Just how much depends on how many houses are listed at the time the new millionaires hit the streets, and how many of them there are.
``This event could have a short-term, localized impact,'' said Johnson.
This week there were about 275 homes priced between $1.5 million and $2.5 million for sale in northwestern Santa Clara County plus Woodside, Portola Valley and Menlo Park, according to the Multiple Listing Service. Agents interviewed said those are the areas and the price ranges that most potential buyers enriched by Google stock would consider.
Even if 200 potential buyers were chasing those homes at once, experts say, it probably wouldn't lift the entire market. But certain homes or areas might see far more bidders.
And some sellers are keeping that in mind.
Manuel Diaz, a retired Hewlett Packard executive, has his five-bedroom Los Altos Hills home for sale at $2,458,000. He thinks the presence of Google buyers could help the market for high-end homes by spurring people who've been on the sidelines to house-hunt soon.
``I don't think I will have to barricade myself right after the IPO because there will be 20 people at my door,'' said Diaz. ``But I think it will be helpful.''
``There's great potential for positive impact,'' agreed Pam Blackman, Diaz's agent with Intero Real Estate Services.
Certainly, no one is expecting a repeat of the dot-com madness, when buyers armed with stock-option wealth frequently bid hundreds of thousands over asking prices to get the homes they wanted.
``Those folks treated it like monopoly money,'' said Jim Nappo, an agent with Alain Pinel Realtors in Los Altos. These days ``everyone is a bit sobered from what happened in the dot-com bubble.''
Hard data on a burgeoning Google effect is elusive. But anecdotal evidence suggests that, at least psychologically, it's starting.
• In the pricey towns of Los Altos and Los Altos Hills, three of Gary Herbert's clients bought homes for between $1.5 million and $2.5 million in the last year, partly to beat the Googlers to the punch. Their thinking was `` `I am going to do it now before I'm competing with all these Google people with free money,' '' said Herbert, who heads Gary R. Herbert Real Estate Services.
• One of Nappo's clients tried to buy a $4.5 million home in Los Altos for $4 million. But the seller held out for full price, citing Google's pending IPO as one reason for his optimism.
• In some cases, mortgage companies are loosening their rules to lend to Google employees who might not be cash-rich now, but soon could be. Ahmad Ghavi, a mortgage broker with Washington Mutual in Palo Alto, said he helped one Google employee with a good credit history get a loan for a house worth about $3 million, with a down payment of only about $600,000 -- or 20 percent -- rather than the 35 percent that would normally be required for a home of that size.
``Now that the company might be going public soon, we have pre-approved them, and extended our underwriting criteria a bit,'' said Ghavi.
• Googlers have been trolling open houses in Los Altos, Palo Alto and Menlo Park, agents say.
``I've seen people come in with smiles on their faces. You can tell they're Google people,'' said Nappo. ``They say they're going to be in position to be looking at upscale houses within a six-month time frame. They're now getting an idea of what the market consists of.''
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texan
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Kalifornian
- Уже с Приветом
- Posts: 7838
- Joined: 16 Oct 2003 22:06
- Location: Kalifornia
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Kalifornian
- Уже с Приветом
- Posts: 7838
- Joined: 16 Oct 2003 22:06
- Location: Kalifornia
Home sales at 16-year high. Bay Area prices keep breaking records -- median hits $545,000.
Bay Area home buyers went on a binge in June, pushing prices and sales counts -- not to mention monthly payments -- to their highest levels in at least 16 years.
A total of 14,104 houses and condominiums changed hands in June in the nine-county region, blasting past the previous monthly record of 12,488 set in August 2003 and representing a 34 percent jump over the June 2003 total of 10, 492, according to DataQuick Information Systems, whose statistics go back to 1988.
The median price for a single-family home hit $545,000, a record for the fifth consecutive month and nearly 18 percent higher than the year-ago figure of $464,000. June's median was also about 3 percent higher than May's median of $530,000.
"It's astonishing," DataQuick researcher John Karevoll said about the sales volume.
"You never break records by that much. It's like Bob Beamon's long jump record," Karevoll said, referring to the legendary track star whose 1968 record stood untouched for 23 years.
The frenzied activity stems from a combination of several factors, including worries about potential increases in interest rates and a growing eagerness among sellers to cash in on sky-high prices, Karevoll said.
For the Yien family of Antioch, the timing does seem auspicious. Elizabeth and Frank Yien estimate the value of their 3,200-square-foot house has doubled in the last five years, from $300,000 to about $600,000. This week, the family toured a five-bedroom model home in Danville listed for about $1 million.
The 4,600-square-foot house had something for everyone: an easier commute for Frank, who is a product manager at a technology firm in Mountain View, and a bathroom for each bedroom -- a major attraction for the five Yien children, ages 9 to 19.
"With the values where we live going up tremendously, it's the time to sell and to get into another house while the interest rates are still good," said Elizabeth Yien, 42.
Fast-growing Contra Costa County, where Yien is focusing her search, posted the largest price increase for the past 12 months in the Bay Area. The median price for an existing, single-family home soared almost 22 percent, from $390,000 to $475,000. At $783,000, Marin County had the highest median price. The combined median, which includes houses and condos, hit a record $516,000 in the Bay Area, up 16.5 percent over $443,000 in June 2003.
The median is the midpoint; half of sale prices were above, half below.
The Santa Clara County real estate market, which hit dizzying peaks during the dot-com explosion and suffered the largest price and sales declines in the Bay Area after the subsequent crash, showed some of its boom-era colors, posting the largest annual increase in transactions.
More than 3,500 homes sold in June, a whopping 55 percent increase over the 2,284 sold in June 2003.
DataQuick's reports, which are based on filings with county recorders' offices, generally reflect sales initiated 30 to 60 days prior.
At the same time that increased inventory appears to be boosting sales tallies, real estate agents say listings remain out of step with demand. Multiple offers are still frequent, although many homes garner a handful of bids, as opposed to dozens, as was common this spring when inventory was particularly tight.
"We could still use more inventory," said Jim Hedges, sales manager at Prudential in San Francisco. "Interest rates are still low ... so buyers are out there."
This week, mortgage giant Freddie Mac reported that the average 30-year mortgage rate has inched down from 6.01 percent to 6 percent -- not significantly higher than this year's low of 5.38 percent in mid-March. The 15- year fixed rate dropped from 5.42 percent to 5.4 percent this week, and the one-year adjustable rate mortgage fell from 4.05 percent to 4.02 percent.
Even with interest rates hovering near historic lows, consumers' monthly payments have achieved new heights -- propelled by ever-higher home prices.
In June, the typical Bay Area buyer committed to paying a record $2,450 per month, before taxes and insurance, compared with $1,860 a year ago, when mortgage rates plunged to levels not seen in at least four decades.
Last month's typical payment figure also tops the previous, inflation- adjusted peak -- $2,365 in April 1989.
To Michael Carney, executive director of the Real Estate Research Council of Northern California in Pomona (Los Angeles County), that may be cause for concern.
While Carney doubts the Bay Area housing market will collapse, he says a growing number of buyers are overextending themselves to buy a home -- a risky proposition at a time when interest rates are poised to rise.
If the 30-year fixed rate increases to 8 percent or more over the next year or so, as Carney forecasts, Bay Area home price appreciation could throttle back to around 5 or 10 percent, as fewer shoppers can afford to bid tens of thousands of dollars over asking prices.
"Prices going up 20 percent a year ... historically, that has always led to trouble," Carney said.
http://www.sfgate.com/cgi-bin/article.c ... 7NC471.DTL
Bay Area home buyers went on a binge in June, pushing prices and sales counts -- not to mention monthly payments -- to their highest levels in at least 16 years.
A total of 14,104 houses and condominiums changed hands in June in the nine-county region, blasting past the previous monthly record of 12,488 set in August 2003 and representing a 34 percent jump over the June 2003 total of 10, 492, according to DataQuick Information Systems, whose statistics go back to 1988.
The median price for a single-family home hit $545,000, a record for the fifth consecutive month and nearly 18 percent higher than the year-ago figure of $464,000. June's median was also about 3 percent higher than May's median of $530,000.
"It's astonishing," DataQuick researcher John Karevoll said about the sales volume.
"You never break records by that much. It's like Bob Beamon's long jump record," Karevoll said, referring to the legendary track star whose 1968 record stood untouched for 23 years.
The frenzied activity stems from a combination of several factors, including worries about potential increases in interest rates and a growing eagerness among sellers to cash in on sky-high prices, Karevoll said.
For the Yien family of Antioch, the timing does seem auspicious. Elizabeth and Frank Yien estimate the value of their 3,200-square-foot house has doubled in the last five years, from $300,000 to about $600,000. This week, the family toured a five-bedroom model home in Danville listed for about $1 million.
The 4,600-square-foot house had something for everyone: an easier commute for Frank, who is a product manager at a technology firm in Mountain View, and a bathroom for each bedroom -- a major attraction for the five Yien children, ages 9 to 19.
"With the values where we live going up tremendously, it's the time to sell and to get into another house while the interest rates are still good," said Elizabeth Yien, 42.
Fast-growing Contra Costa County, where Yien is focusing her search, posted the largest price increase for the past 12 months in the Bay Area. The median price for an existing, single-family home soared almost 22 percent, from $390,000 to $475,000. At $783,000, Marin County had the highest median price. The combined median, which includes houses and condos, hit a record $516,000 in the Bay Area, up 16.5 percent over $443,000 in June 2003.
The median is the midpoint; half of sale prices were above, half below.
The Santa Clara County real estate market, which hit dizzying peaks during the dot-com explosion and suffered the largest price and sales declines in the Bay Area after the subsequent crash, showed some of its boom-era colors, posting the largest annual increase in transactions.
More than 3,500 homes sold in June, a whopping 55 percent increase over the 2,284 sold in June 2003.
DataQuick's reports, which are based on filings with county recorders' offices, generally reflect sales initiated 30 to 60 days prior.
At the same time that increased inventory appears to be boosting sales tallies, real estate agents say listings remain out of step with demand. Multiple offers are still frequent, although many homes garner a handful of bids, as opposed to dozens, as was common this spring when inventory was particularly tight.
"We could still use more inventory," said Jim Hedges, sales manager at Prudential in San Francisco. "Interest rates are still low ... so buyers are out there."
This week, mortgage giant Freddie Mac reported that the average 30-year mortgage rate has inched down from 6.01 percent to 6 percent -- not significantly higher than this year's low of 5.38 percent in mid-March. The 15- year fixed rate dropped from 5.42 percent to 5.4 percent this week, and the one-year adjustable rate mortgage fell from 4.05 percent to 4.02 percent.
Even with interest rates hovering near historic lows, consumers' monthly payments have achieved new heights -- propelled by ever-higher home prices.
In June, the typical Bay Area buyer committed to paying a record $2,450 per month, before taxes and insurance, compared with $1,860 a year ago, when mortgage rates plunged to levels not seen in at least four decades.
Last month's typical payment figure also tops the previous, inflation- adjusted peak -- $2,365 in April 1989.
To Michael Carney, executive director of the Real Estate Research Council of Northern California in Pomona (Los Angeles County), that may be cause for concern.
While Carney doubts the Bay Area housing market will collapse, he says a growing number of buyers are overextending themselves to buy a home -- a risky proposition at a time when interest rates are poised to rise.
If the 30-year fixed rate increases to 8 percent or more over the next year or so, as Carney forecasts, Bay Area home price appreciation could throttle back to around 5 or 10 percent, as fewer shoppers can afford to bid tens of thousands of dollars over asking prices.
"Prices going up 20 percent a year ... historically, that has always led to trouble," Carney said.
http://www.sfgate.com/cgi-bin/article.c ... 7NC471.DTL
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texan
- Уже с Приветом
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- Joined: 18 Mar 2001 10:01
В коробках не коробках, но наверняка захотят улучшить жилищное положение, а может и investment property захотят прикупить.
Уй, натурально, мадам, вы не понимаете (c)... Te коробки из под холодильника, в которых гугли жили до IPO, что с ними будет, когда гугли решат улучшить жилищьное положение? Почему вы считаете, что они бросятся спекулировать жильем?