Bill, Would this be along the lines of what you are talking about? If you have any further thoughts it would be appreciated. Although I have lived through bubbles (and experienced their goodness and some bad) I am still in a period of trying to understand how they are deflated exactly, what the next movements might bring, and why....
real estate is a long-duration asset with high transaction costs. this lady has no business speculating in anything, particularly not out-of-state SFRs. now all she needs is an adjustable rate mortgage
actually CPI only considers rent and not home PRICES... i think its like 42% of the total. so lower rates increase home ownership and prices skyrocket, but rents decline or remain static - there you go, no "housing" inflation
U.S. National - AP One in Four Californians Consider Moving Thu Nov 18, 5:48 AM ET U.S. National - AP By JIM WASSERMAN, Associated Press Writer SACRAMENTO, Calif. - A fourth of all Californians are thinking about moving â either out of state or just to another town â to bring down their housing costs, a new survey shows. High rents and rising home prices have residents, particularly younger ones, rethinking the value of the mountain views and ocean shores they say they treasure. Of the respondents under 35, for example, nearly half say they might relocate to somewhere cheaper. The study, released Thursday by the Public Policy Institute of California, found that even many homeowners now see little upside to rising prices that have greatly inflated their property values, with many believing they couldn't afford to buy another house in their own neighborhoods. Sixty percent of the respondents worry their children won't be able to buy homes in their part of the state. Instead of being optimistic about life in California, a new generation "coming into the owning stages of their lives ... are exactly the people who are talking about moving elsewhere, " said the institute's Mark Baldassare, author of the statewide study. "You're talking about your work force. You're talking about your future." The survey, the most comprehensive of its kind in years in California, reveals the moving-out sentiment is highest in coastal areas and many are acting on it. Since 1995, according to the institute, more than 350,000 residents have moved from the coast to the less expensive Central Valley. California's traditionally high mortgage costs are also further discouraging renters, the survey reports. Only one in five who hope eventually to buy a house are confident they can do it. The results dovetail with findings this month by the California Association of Realtors showing that only 19 percent of the state's households can afford the state's median-priced home of $465,000. That's a 5 percent drop from a year ago. Nationally, the median-priced home â where half cost more and half cost less â was $186,600 in September. The survey of 2,502 people was taken from Oct. 21 to Nov. 1 and has a margin of sampling error of plus or minus 2 percentage points
Oneway, another nice chart! Interesting. I'm a small independent builder. Maybe the National Builders think in chart and graph terms, but I don't. And most small builders don't. If this helps anyone, great: I have to take a regional view. I stick to a farm area within my region that I want to target. I watch Days on the Market and Price/sq ft. Over a fairly short time I know what is happening. These can be leading indicators of a recovery or a warning sign for a slump. It is a micro view. I'm aware of the macro, but I want to wait for regional confirmation. I try to err on the side of being inactive. More chart work, etc. distracts me from producing a good project, keeping up with style trends, and networking. Right now, signals are getting very bleak in Denver.
U.S. leading indicators fall for 5th straight month - Thursday, November 18, 2004 3:34:36 PM http://www.afxpress.com WASHINGTON (AFX) - The U.S. economy is losing steam, the Conference Board said Thursday, reporting that the index of U.S. leading economic indicators fell 0.3 percent in October, the fifth straight decrease. The string of declines "is a clear signal that the economy is losing steam, and may start off 2005 with a relatively weak pace of economic activity," said Ken Goldstein, economist for the board. A separate business confidence survey "suggests that worries about where the economy is heading may cause some strategic plans to be put on hold," Goldstein said. "And the signal will be much stronger if consumers turn more cautious, just as the holiday season approaches." The September leading index was revised lower to a 0.3 percent decline, from a 0.1 percent drop previously Seven of the 10 leading indicators fell in October, led by consumer expectations, money supply and interest rate spreads. Vendor performance, factory workweek, building permits and new orders for capital goods also contributed to the decline in the leading index. Three indicators gained ground in October: initial claims for jobless benefits, orders for consumer goods and stock prices. In the past six months, the leading index has dropped 0.7 percent, with three of the 10 indicators strengthening. The coincident index rose 0.3 percent in October, with all four indicators rising. The lagging index increased 0.2 percent in October Home prices may drive people out of California Although Californians deeply value their quality of life in the Golden State, a surprising number say that the cost of housing could drive them away, according to a new survey released Thursday by the Public Policy Institute of California in collaboration with the Hewlett, Irvine, and Packard Foundations. Overall, Californians express grave concerns about the cost of housing and see little upside to the run-up in housing prices. One quarter (24 percent) of Californians today say the cost of housing in their part of California is forcing them to seriously consider moving - to another part of the state or away from California altogether. This sentiment is highest among coastal residents, and many are acting on it: A recent PPIC study found that coastal Californians are driving much of the Central Valley's population boom. Much of the Sacramento area's growth in the past decade has been attributed to such migration. Nearly all Californians (94 percent) perceive that home values have been increasing in their region, with 84 percent saying they have increased a lot in recent years. Some see broad benefits to skyrocketing housing prices - most residents (82 percent) view it as at least somewhat important to the economic vitality of their part of the state. But they express greater ambivalence about this phenomenon as it relates to them personally. Specifically, 49 percent of Californians say that increasing average home values in their part of the state are a bad thing for them and their families, while 41 percent call it a good thing. One reason for this perspective? Californians worry about the fallout of increasing prices for younger family members. Three in four adults (77 percent) say they are at least somewhat concerned that the cost of housing will prevent the younger generation in their family from buying a home in their region of the state. Moreover, one in three (31 percent) cite a more immediate effect of housing costs - that is, it places a financial strain on their households today. "Californians understand the economic value of our hyper real estate market, but they also feel the pinch of high prices," said PPIC Survey Director Mark Baldassare. A majority of Californians (55 percent) view the availability of affordable housing as a big problem in their region today, placing it just below traffic congestion (59 percent) and far above the lack of well-paying jobs (35 percent), population growth (35 percent), and air pollution (30 percent) as a regional concern. Orange and San Diego County residents are the most likely (63 percent) and Central Valley residents the least likely (39 percent) to see affordable housing as a big problem in their area. Findings are based on a telephone survey of 2,502 California adult residents interviewed between Oct. 21 and Nov. 1. Interviews were conducted in English, Spanish, Chinese, Korean, or Vietnamese. The sampling error for the total sample is +/- 2 percent. http://piggington.com/ "The moving company that moved [my former business partner] told him that for every truck moving a household into California, the moving companies were sending 4 truckloads out. 'Out', as in out of state."
http://piggington.com/ 11.20.04 - September Data September data is in. Inventory was up and sales were down, as it's been since June. And like August, prices were ever so slightly down. What is striking to me is that the obvious decline in demand has taken place in an environment of declining mortgage rates (rates went from 6.29% in June to 5.75% in September). The market's behavior in the last few months belies the oft-repeated theory that housing will do fine as long as rates stay low. Even with low rates, speculative frenzies can exhaust themselves: eventually, everyone who wants to be in the market is already in and there are no more buyers. I believe we've been seeing the start of that phenomenon for the last few months, although the downturn has been tempered by declining rates. Once rates start rising again I believe that demand will dry up a lot faster, and that we will start to see prices accelerate to the downside a lot faster. This may already be happening, as rates have been rising since the election, but we won't know until we get the data in a couple months.
Thanks for the research onewaypockets...I have been concerned about the market here in San Diego...and rising supply...is a sure sign of lower prices to come...I still don't see anything for sale in my neighborhood though. A freind of mine is an agent...and it seems that a significant source of the supply is the overpriced apartments in downtown san diego ( and more supply still coming in that area). Have you considered this in your analysis? Mike
Actually, I live in Ventura County. But San Diego, Ventura, Los Angeles, and Orange counties have tracked perfectly in sync during the last few real estate cycles going back over 30 years... My "research" consists of only armchair observations, much reading, and my background of some real estate development and buying and selling properties starting when I was 26 years old. I have seen and participated in the good, the bad, and the very ugly in the market. The San Diego area has two interesting web sites that cover it well and mesh with my own opinions. One is http://piggington.com/ and the second is http://www.realestatetiming.com/bibliography/ Many of the charts and graphs come from these sites, not original work of my own. If your friend is a real estate agent, his comments negating any increases in inventory may be suspect. FWIW