He doesn't even address the fact that about 25% of demand during this boom was investors/flippers. And that's the "official" number. Let me tell you a dirty little secret. A significant number of investors/second home buyers LIE on the application so they get better terms (low/no downpayment, lower int rate). So that number is low. Over half the homes in some markets are vacant! Guess who bought those? Certainly not someone looking for shelter. Do you think they will come back in the same numbers. I think what we saw over the past few years in RE was a once in lifetime event. (See my post above re: flipping if you haven't already)
I find that very hard to believe. Gainesville suffered from severe shortage of new apartments around the university. How do you loose $63,948 on a new $150,000 2/2? Even Single Family wasnt priced high enough to loose that much, maybe they are talking about outside of Gainesville, big properties with lots of land tied to them. That figure must be based on a very small sample, possibly one bad community.
That's int'g. That's a side I haven't read on. But I think the housing market (and China) are largely responsible for anything good that's happened in our economy over the last few years. But the problem is that it's mostly a orgy created by all the excess liquidity that's poured into certain markets like housing due to fed and governmental policies. We now have a very high rate of home owners with int only and heavy debt and ARMs, etc. And 40% of the new jobs have come from housing and that ain't happening any more. It's gonna get real interesting...
Apparently, only 10% of flippers lost money in Gainesville, so I agree, the figure must be pased on small sample size. There are lies, damn lies and statistics. http://www.homesmartreports.com/docs/hsrnews/flippingactivity92106.htm
this past week or so, rates on commercial/apt loans must have dropped, becuase biz is justing ripping pretty nicely. talked to Marcus & Millichap broker & he said apt prices have come down as sellers realize they cant get old prices, and activity is picking back up. july was also for me, aug was busy, many guys were slow in august, but it is rkinda rocking now. i had to turn some work away today. dead cat bounce? who knows, but feels good to be busy.
http://www.marketwatch.com/news/story/Story.aspx?guid={32209313-C23C-4946-B9B5-5392D6499D24}&siteid= Existing-home prices fall for 1st time in 11 years Sales drop 0.5% in August to lowest pace since January 2004 By Rex Nutting, MarketWatch Last Update: 10:26 AM ET Sep 25, 2006 WASHINGTON (MarketWatch) -- The collapsing U.S. housing market crossed another milestone in August, as the median sales price of existing homes fell for the first time in 11 years and for just the sixth time in the past 38 years, the National Association of Realtors said Monday The median sales price fell 1.7% year-over-year to $225,000 in August. Sales of existing homes fell 0.5% in August to a seasonally adjusted annual rate of 6.3 million, the industry group said. It was the lowest sales pace since January 2004. Sales have fallen five months in a row. Sales are down 12.6% in the past year. Realtors said the price decline shows the market is stabilizing, but other economists said the correction has a ways to run. "Sellers are finally getting it," said David Lereah, chief economist for the real estate group. "The price drop has stopped the bleeding. Sales have hit bottom." "The existing-home market has fallen a long way from its top, but there is more to come," said Phillip Neuhart, an economist for Wachovia. Meanwhile, inventories of unsold homes rose to a 13-year high. "With inventories so high, there is a lot more adjustment before the existing-home market hits bottom," said Joel Naroff, president of Naroff Economic Advisers. "The Fed members are acutely aware of the building housing problems, and the weak market is a major reason for their forecast of a slower economy and restrained inflation." It was the first time since April 1995 that median prices had fallen on a year-over-year basis. It was the second-largest decline in the 38-year history of the Realtors survey, exceeded only by a 2.1% drop in November 1990. Prices have been rising at an annual rate of 7.5% over the past five years. As late as October, prices were up 16.8% on a year-over-year basis. The deceleration has been the fastest in the history of the survey. The price correction is a welcome development, said Lereah. "I am confident the housing sector is picking up," he said in a press conference. Lereah said he expects prices to continue to drop for the rest of the year, which would keep sales from falling further. If sales do flatten, "we'll have achieved a soft landing," Lereah said. Economists were expecting a larger decline in sales to about 6.18 million in August, according to a survey conducted by MarketWatch. Inventories of unsold homes rose 1.5% to 3.92 million, a 7 1/2-month supply at the August sales pace, the most in relation to sales since April 1993. The realtors say a six-month supply represents a balanced market. Sales of single-family homes were unchanged at a 5.51 million annual pace. Single-family-home sales are down 12.3% in the past year, while median prices are off 1.7%. Inventories of single-family homes are up 55.3% in the past year to a 7.3-month supply. Condominium-unit sales fell 3.5% to 793,000 in August. Condo sales are down 14.5% in the past year, while median prices are down 2.4%. Inventories of condos are up 75.5% in the past year to an 8.6-month supply. Sales fell 2.3% in the West and 0.8% in the South. Sales rose 1.9% in the Northeast and 0.7% in the Midwest. Lereah said the sales fell in the West because sellers still have not adjusted their expectations on prices. Median prices are up 0.3% in the past year in the West to $345,000. The Commerce Department is slated to report Wednesday on new-home sales for August. Economists expect sales to fall about 3.4% in August to a seasonally adjusted annual rate of 1.036 million, which would be the lowest since April 2003. As of July, sales of new homes had fallen 21.6% in the past year, while inventories of unsold new homes had soared 22.4%. Rex Nutting is Washington bureau chief of MarketWatch.
Are these your neighbors? OWP http://cbs5.com/30minutes/local_story_266005029.html Brian is a Bay Area mortgage broker. "Michael" is his client -- a 23-year-old auto mechanic. The payment on Michaelâs new home is $4,200 a month, but he only earns about $4,000 a month -- leaving him $200 in the red. He was only able to get the loan because his broker used "stated income" to inflate his paycheck. Brian (the broker) said, "I put on the application that he made $13,000 a month, which was unverified ⦠That's the definition of a stated income loan. You state the income. Most definitely it was a fraudulent loan. The income was literally made up from thin air." One broker, "Dennis," works for a mortgage company where he says a whopping 85 percent of loans are stated income. He says out of that 85 percent, they all have inflated numbers. "All of them, because that's why you're going stated." Dennis added. "We've seen the banking industry keep getting more creative, and more creative, and more creative to keep putting fuel on this fire of home appreciation." But if it leads to getting their piece of the American dream, homebuyers must be happy, right? Not according to Beverly and Dwayne, two Bay Area homeowners."Right now I'm living from paycheck to paycheck. I'm struggling with putting gas in my car just to get to work," Beverly said. Last May, Beverly and Dwayne bought their first home. Their broker assured them they could afford the half-a-million-dollar price tag based on Beverly's income as a social worker. She makes $2,750 a month. But what they didn't know? To make the deal work, the broker boosted Dwayne's salary to an impressive $8,000 a month. "I wish I did make $8,000 a month," Dwayne said. In truth, Dwayne is out of work and only gets a small disability check. Nevertheless, based on their inflated income, they qualified for a mortgage of $3,700 a month. That's almost $1,000 more than Beverly's entire paycheck. "I didn't find out until the signing," Beverly said. "And I said 'I can't afford to pay that,' and the realtor said, 'Don't worry about it, we're gonna immediately refinance it.' " Refinancing is what keeps many new buyers in the game, but only if interest rates stay low and housing prices go up. Instead, interest rates are rising. And though Bay Area prices are still going up, the market is weakening. Beverly and Dwayne have spent the last five months trying to refinance. Their life savings are gone. They sleep on an air mattress. They've already been late on one loan payment. http://www.abcnews.go.com/GMA/story?id=2491517&page=1 Just outside Los Angeles, Cindy Schwanke's family is waging an all-out battle to sell its three-bedroom home. "We never really thought we'd have a problem selling," she said. After seven months and three real estate agents, there was still no sale. So Schwanke quit her job as a pastry chef to focus all her efforts on selling her house. "I just didn't have enough time to clean the house and stage it properly for Realtors to come in, and I felt very uncomfortable," she said. To make her home more appealing, she spent $25,000 improving it, and she dropped her asking price by a whopping $100,000. "I try to bring people in. I bake cupcakes for them. I ⦠offer them water, and I do whatever I can to make it a pleasant experience for them," she said. So far, her cupcakes haven't done the trick.