I think if you were to plot the actual median price it would have a postive slope. That would show the divergence with the rate of change which this dispicts. John
I watched Bernanke and his Banker buddies today on TV. His comments pretty much indicated that the housing market will fall hard here in SoCal. One question was about the consumer and he responded that the thought that the "consumer" had done a "good" job managing it's balance sheet. That the consumer was in "good shape". One question was about the lag in effects of rate changes. He indicated that they took that in consideration but that they had to take their best shots using the data they had and projecting into the future. He described it as a QB leading his wide receiver down the field. What he said but didn't say was they he was not going to conduct rate policy in a way to that would maximize housing values just for the sake of the homeowners. In order words, he was not going to get rates low just to bail out those people whose ARM's are going to be reset. Until now I was thinking that they may care about that and take it into consideration. Now I know for sure that they don't care about bailing these homeowners out. John
The basic reason more houses sell in the first six months is very simple: Families want to get settled in for school in Sept. You can do charts till you are blue in the face but that is the over riding concern of families with school children. Taking "stock market" logic and applying it to the "housing market" is just plain silly. Housing market lives and dies with JOBS in local economy. High jobs loss means house price and RENTS go down. Do you really think that a company lays off only "homeowners"??? People, owner and renter, find another job or move to where there is a job. ARMS: Lenders will adjust the rates in order to suit the borrower if enough borrowers have problems. If housing market slows or decreases, lender has absolutely no desire to foreclose on house. Why would house have any more value once lender owns it???? Lender will work with borrower to enable him to stay in loan if at all possible. Using San Francisco and other "hot" or "tight" markets as average examples is also very silly. Use GOOG as typical IPO!!! SteveD
Will house prices boom again? "After a big slowdown last year, the early months of this year suggest that 2006 may see a return to the double digit inflation rates that characterised the housing market in 2002, 2003 and 2004." Global housing boom have resumed after a quick breather in some parts of the world. Just to get an idea whats going outside the country:
So is it a fair statement to feed the bears and tell them, "you were right, the bubble burst" and then say, "but the bubble was pretty small"?
You will be fine in North Florida. You would just have to see SoCal to believe how crazy it got. Over off the coast hwy in Encinitas there are a lot more signs out then just a month ago. One say "6 units for sale". Cheesy little places too. Picture houses on St. George Island going for $5mill. John
Hey, anyone else watching the home builders today? DHI, for example, is also taking a "breather" today....down almost 7% today, down 13 % in the last week, down 22% in the last month, down 46% from highs. Ouch! OWP
Realtors see lower US home sales 2 hours, 46 minutes ago WASHINGTON (Reuters) - The National Association of Realtors on Tuesday lowered its forecast for U.S. home sales in 2006 and called on the Federal Reserve to stop raising interest rates because parts of the housing market are "vulnerable." "Experiencing a slowing from a hot market is a good thing because we need a solid housing sector to provide an underlying base to the economy, and slower appreciation will help to preserve long-term affordability," said David Lereah, the group's chief economist. "But this is a time for the Fed to pause on rate hikes because we have some interest-sensitive housing markets that have become vulnerable," he said. The trade group, in its monthly forecast, said sales of existing homes should fall 6.8 percent to 6.60 million this year from the 2005 record of 7.08 million. Sales of new homes should decline 13.4 percent to 1.11 million from a record 1.28 million in 2005. That is below the group's earlier forecast of 6.62 million existing home sales and 1.13 million new homes sales in 2006. The Realtors said housing starts should fall 6.2 percent to 1.94 million in 2006 from 2.07 million last year. The U.S. housing market has been steadily cooling down after a five-year run that shattered sales and construction records. The market began to slow last year as mortgage rates started to climb. While the market is expected to keep easing off its record levels throughout the year, 2006 is still expected by many economists to be the third best year for housing ever. The Realtors said the 30-year fixed-rate mortgage should average 6.9 percent during the second half of the year. The national median existing-home price for all housing types is forecast to rise 5.3 percent to $231,300.