 | ||||||
San Diego Housing Bubble News and Analysis |
||||||
~Navigation~~Current reading list~
~User login~~RSS~
|
First glimmer of good news for San DiegoUser Forum Topic
Submitted by sandiego on April 2, 2008 - 1:16pm
Housing Trends America's Riskiest Real Estate Markets There's roulette and there's skydiving. Then there's investing in Detroit and Cleveland real estate. That's especially risky because those markets are in freefall. Lenders have fled, foreclosures are on the rise, homes aren't selling and local economies have stalled. Given the state of the country's housing market, it wasn't hard to find others like them. To do so, Forbes.com looked at the country's 40 largest metros and combined data on foreclosures, from RealtyTrac, a foreclosure listing service; job growth from the Bureau of Labor Statistics; transaction volume data from Radar Logic, a New York real estate research firm; and vacancy and current inventory rates from the U.S. Census Bureau and ZipRealty, an aggregator of multiple listing service data. America's Most Overpriced Suburbs Risky Business Subprime still matters, as do the concentration of adjustable rate mortgages. Transaction volume, however, especially over the next 12 months is becoming an increasingly important gauge of a market's health. This month the National Association of Realtors reported that sales volume of existing homes was up 2.9%, the first such month-to-month rise since July. In cities like San Diego, one of five major metros where transactions rose, that's good news, assuming it's sustained. What makes transaction volume a good indicator is that it shows how easy it is for people to get loans and how much confidence there is in the market. If mortgages are available and buyers have some faith in the value of the home, they're more likely to buy. San Diego's present conditions suggest that over the next half-year, prices may start to rise. That's because "there's usually a three- to six-month lag between when transactions go up and prices go up," says Jonathan Miller, president of Miller Samuel, a Manhattan real estate appraisal firm. Another good sign for the coming year? Increased credit availability. We took into account increased Fannie Mae and Freddie Mac (GSE) loan limits. The new legislation will open up credit in markets such as Sacramento and San Diego by boosting the GSE loan limit by 125% of the median price. That's a huge deal for San Diego, where 18% of the market will see improved lending conditions, based on projections by Radar Logic, a New York-based real estate research firm. Not as fortunate are hard-hit foreclosure markets such as Denver, which saw 50,000 foreclosure filings last year, according to RealtyTrac, which comes out to a 2.6% foreclosure rate, ninth in the nation behind the likes of Las Vegas and Detroit. Here, GSE loan limits won't change to boost liquidity, though at the beginning of this year the local economy had added jobs at a rate of 2%, which is triple the national average, according to the Bureau of Labor Statistics. The availability of jobs gets at the critical question of how much money is available within a market. A market with money on the sidelines has better recovery prospects because it means potential buyers are out there. A market without economic activity to generate buyers is simply sinking. "People aren't pulling the trigger right now," says Steve Cesinger, vice-chairman at Dewberry Holdings, an Atlanta-based real estate investment group. "But it's a big difference if they're not pulling the trigger because the prices haven't declined enough or because they're waiting to catch the bottom."
|
~Finance and investing~*Investment advisory services and securities offered through Girard Securities, Inc., member SIPC/FINRA. ~Recent articles~~Active forum topics~
Sponsored Links
|
||||
| © 2004-2008 piggington enterprises llc | terms of use | privacy policy | powered by Drupal | ||||||
 |  |  | ||||
Except for the expected Spring bounce, prices aren't going to rise in San Diego right now. It's not going to happen. Ignore NAR, we're probably going into a recession.
Ah yes, the infamous third quarter rebound we have been hearing so much about. It forgot to show up last year for all those pumpkin patch sitters, but this year will be different. WHy you ask. Well because sales went up 2.9% from January to Feburary after the longest sustained price drop since the great depression while interest rates plumeted to generational lows not seen since the bubble fist got inflated. (never mind the YoY double digit drop of 31.7% in SD)
What does all of this mean?? Well it means that prices are gonna totally reverse course and start rising agiain, setting off bidding wars just like 2005! You had better buy now, dont want to miss out!
Good news? Do you know what site you are on?
It's wishful thinking anyway.
For some reason "journalists" and Ben Bernanke, who want to protect their own depreciating home values, would like it if you would just take their spin as fact.
well.. my friend is buying, "prices are going back up!" sigh...
"first" glimmer? What do you mean? This is very similar to all bull crap that's been spouted over the last two years of housing free-fall. I'm starting a new hypothesis: the number of articles claiming things are turning around is inversely proportional to home prices. If I had a nickel for every "we've reached bottom" article...
I'm not sad that people are buying. Every time they do the comps in the neighborhood go a little lower. I'm glad it's them buying and not me. We need people at the forefront to drive prices down. Don't worry, the inventory is high enough to accommodate all of these knife catchers.
"Transaction volume, however, especially over the next 12 months is becoming an increasingly important gauge of a market's health."
Translation:
We will look under any rock to find a glimmer of light if it means we can ignore the blatant reality that housing is screwed for years to come.
Yup. Exactly.
A) Transaction volume in boom times: 50 houses sold for $1M
B) Transaction volume in bust times: 50 houses sold for $100k
TransA = TransB => all times must be boom times
Let's also not forget to ignore rising foreclosures + rising inventory and the basic fact of economics that transaction volume can be increased by lowering the price.
The only sensible thing I see here is the notion that sales volume is important.
Remember sales volume started slowing in 2004, preceding the price peak by a year or so. Likewise, at the bottom, the number of sales will start to increase a year or two before there is upward pressure in prices. It takes a sustained increase in volume to soak up the bloated inventory. I wouldn't be too worried about rapid upward price movement for at least a year after it is apparent that sales volume has improved.
Sales volume is a very useful indicator (not when focusing on noisy month-to-month fluctuations, but when looking at longer term trends).
The original article can be viewed here ...
http://www.forbes.com/lifestyle/2008/03/...
The author's writing style (forget the content) is actually pretty good and he might sound like a grizzled old veteran to some folks so I thought it would be interesting to post his photo. My gosh, is he still in high school ?
author Woosley
Shouldn't we consider how long sales will continue. Making an assumption sales will continue at this pace. Once people walk away or foreclose, all those people aren't going to be buying for a couple of years, if they get their credit in order. That leaves the piggs and others who didn't take the bait and buy in the boom. Most of us are waiting for prices to get lower. Spring is getting fence-sitters and knife-catchers to pull the trigger, but how many are there that will absorb the inventory and continue to absorb the inventory. Overly optimistic, I think, to assume the sales will continue at a high volume.
FSD,
I totally agree with you about the sales. If sales pick up again and we fall to a 6-7 month inventory of homes, then yes, prices will start to rise slowly again. However, we are nowhere near even 8 months of inventory, so I am not worried.
As for the author, I am sure he is just outa his undergrad, as represented by the top of the spiderman tie he chose to wear in the file photo. I am sure it use to knockem dead at all those halloween parties. Spiderman, Spiderman, doing whatever a spiderman does....... :)
Nos. totally agree with you about the comps thing. There is plenty for everyone. If the relators tell you all about pentup demand, ask them about pentup supply. There are alot of people who want to sell, but refuse to take a loss, or be a part of a "fire sale". It ant gonna be a V shaped graph.
Harry Osbourne aka Green Goblin
Is who that young man looks like and not Spiderman.
How dare you question that kid, he's seen it all.
(all= lil becky miller pulled his hair back in gradeshool oh back in 91...when the last down turn happened).
haha LOL.. just as prices in SD start to drop some one runs that BS. Very funny.... prices in SD will rise in 3-6 months. That's the laugh of the year. Typical propaganda.
"Just as prices in SD start to drop"? Where have you been for the past 12 months?
Forbes is renowned for its sensational journalism. They are known as a mouthpiece for realtors and a leading advocate for housing.
I thought I read that we would continue a downtrend and the end of 2008 was going to be worse than now.
The graphs, etc...would indicate this downtrend will continue through 2010. More resets coming. Unless the guv can somehow buy up all the property and artifically lift the prices or keep them high. THe economy is down so still, who can afford to buy? Maybe all the foreigners will come over a grab these "bargains."
As Rich has shown in previous info...many jobs were related to the bubble...and it would appear now SD is overbuilt.