One of the big questions is who is to blame for the housing bubble. Here is my list:
This list is NOT in any particular order. Enjoy.
The slowing of the growth of real GDP in the fourth quarter of 2005 seems largely to have reflected temporary or special factors. Economic growth has rebounded strongly in the current quarter but appears likely to moderate to a more sustainable pace. As yet, the run-up in the prices of energy and other commodities appears to have had only a modest effect on core inflation, ongoing productivity gains have helped to hold the growth of unit labor costs in check, and inflation expectations remain contained. Still, possible increases in resource utilization, in combination with the elevated prices of energy and other commodities, have the potential to add to inflation pressures.
The Committee judges that some further policy firming may be needed to keep the risks to the attainment of both sustainable economic growth and price stability roughly in balance. In any event, the Committee will respond to changes in economic prospects as needed to foster these objectives.
As spring approaches, home buyers’ and sellers’ thoughts turn to the real estate market. Today, with the premiere of television advertising spots titled, “Don’t Try This at Home,” the NATIONAL ASSOCIATION OF REALTORS® encourages home sellers to protect what could be their largest investment by enlisting the help of a professional.
“Selling a home is like climbing Mount Everest,” said Thomas M. Stevens, NAR president and senior vice president of NRT Inc., from Vienna, Va. “If you don’t prepare correctly, you’ll never achieve your goal. Getting a signed contract is like reaching the peak, but that’s only half the journey. Many things can happen on the way back down the mountain. Savvy sellers know to hire a REALTOR® to protect their interests and guide them through.”
Home owners who try to sell their home without professional help must overcome a number of hurdles,
Thats all folks. :-O
WASHINGTON (AP) - Things have really changed for the Washington area's housing market.In Loudoun County, where homes were the median home price last year was $535,000, it now takes an average of 78 days to sell a home there. That's more than six weeks longer than it took last year.
Homes closer to Washington in Virginia and in Montgomery County (website - news) are staying on the market for an average of two months before they sell, while homes in Prince George's County last for an average of 38 days.
According to the real estate listing service Metropolitan Regional Information Systems, there were nearly 27,000 houses for sale in the Washington area at the end of February, up from about 9,400 a year earlier.
Real estate experts say homes are now more likely to sell faster if sellers are more willing to negotiate. Some have been lowering the asking price, offering to pay closing costs or being more flexible about move-in dates. [ABC 7 News, March 27, 2006]
This is the most confused Craigslist posting I have seen in a while.Yes, that's right, just as the Web is home to vivacious communities of peak oil doom-and-gloomers, gleefully sharing notes on the latest signs of the coming apocalypse, so too does the Internet offer its welcome arms to hordes of obsessive real estate watchers, busily fixating on every last bit of data that might indicate the great U.S. real estate boom of the 21st century has finally imploded. (There are scores of such sites -- check out the right-hand column of Bubblemeter for a starting point.)Thanks for the mention. Bubble Meter Blog tries to mantain a comprehensive list of active bubble bloggers.
From the Boston Herald: House prices still in slide: Realtors report drop in medianMore states and metropolitan areas will be joining Massachusetts, in having YoY (Year Over Year) median home price declines, in the coming months. Stay tuned.
Bay State house prices are falling on an annualized basis for the first time in a decade as Massachusetts housing continues to cool - bucking a national uptrend.
The Massachusetts Association of Realtors reported yesterday that median house-sale prices dropped to $339,450 last month, down 0.2 percent from February 2005.
The decline marks the first time since June 1996 that prices have fallen for any 12-month period as a whole"
“We have had five consecutive record years, and you can't sustain that forever,” David Lereah, chief economist for the National Association of Realtors, said at the New England Realtors Conference held in Boston yesterday. “2006 is a year to catch our breath.”
Lereah said predictions reported by some economists that a real estate bubble is on the verge of bursting are misleading.
“It's more like a balloon that inflates and deflates,” he said. “The air is coming out of the balloon, but the bubble is not bursting.”
Lereah said most local housing markets are healthy, though home sales in 2006 will likely not be as strong as in recent years. But sales could bounce back in 2007 and for the rest of the decade. ( Lowell Sun 3/21/06)
The CBOE Futures Exchange (CFE) announced Friday that it plans to launch futures contracts based upon median prices in the NATIONAL ASSOCIATION OF REALTORS®' existing-home sales data.Yikes! The NAR was the same people who produced the infamous Anti Bubble Reports.
Through a licensing agreement with NAR, CFE has created five new futures contracts designed to track the median price of existing-home sales nationally and in four distinct regions within the United States. CFE plans to launch the new contracts in the second quarter of 2006, pending regulatory approval.
“With the U.S. housing market valued at nearly $20 trillion, real estate is not only the hottest topic of conversation, it is an asset class unto itself that is arguably one of the most important segments of the U.S. economy,” said CBOE Chairman and CEO William J. Brodsky. “CBOE gave careful consideration to the development of this contract to ensure that it had practical application for hedging as well as speculating, offering a chance to participate in the real estate market to a wide range of investors — whether your outlook is regional or national, bullish, or bearish.”
“The launch of the NATIONAL ASSOCIATION OF REALTORS® Existing-Home Sales Median Price futures contracts marks an important milestone in the evolution of housing as an investment. Now investors, including home owners, real estate professionals, and companies in the real estate business, have a new way to participate in the housing market. In partnership with the CBOE, NAR is proud to be playing a central role in the creation of this new marketplace,” says Thomas M. Stevens, NAR president.
In this chart 100 represents the average sales price for Northern Virginia for March for a given year. The 100 figure is the base price for the housing index. Hence, if the average sales price was 300K in March 1999 and had risen to 315K by April 2005 the price index would be 105 [ [(315 /300) * 100] for April.
Although the volume of single family homes and condos sold in February 2006 in Northern Virginia was 20 percent below the units sold totals for February 2005, average sales prices have increased 6 percent, to $514,116.More than four times as many active listings were on the Northern Virginia market in February 2006 than February 2005, up 316 percent from 1,584 to 6,588.
February 2006 sales volume in the Greater Northern Virginia region was also more than 20 percent below volume in February 2005. Sales prices, however, have increased 9 percent, to $483,872. Greater Northern Virginia includes Fairfax County, Fairfax City, Arlington County, Alexandria, Falls Church, as well as Prince William, Loudoun, Fauquier, Culpeper, Madison, Clark, and Rappahannock counties.
Active listings in the Greater Northern Virginia area were significantly higher in February this year than in 2005. February's total of 14,662 active listings were more than 250 percent greater than the number last year, which was 4,173.
Location: Small Condo Building @ 1900 S Street NW in Washington, DC
But the doomsayers, Lereah says, are mistaken in their dire predictions. Their big mistake, he says, is basing their forecasts by comparing housing appreciation with income growth. Instead, he says, they should look at the percentage of mortgage debt as it relates to income.Lereah says it would take a "perfect storm" to swamp the real estate industry. There would have to be a slumping economy, job losses, a large inventory and a significant increase in interest rates to create that storm. The closest and most recent example of that occurring, he says, is Boston, which lost 15 percent of its labor force in 1990 and '91.
He sees no such storm gathering in the distance. Instead, he sees a slight contraction in the real estate balloon throughout 2006 and a healthy expansion in 2007.
And that, he says, is more important than most people realize."The only way to build wealth, for 80 percent of Americans, is real estate. If the balloon bursts, then 80 percent of Americans will have trouble with retirement."
Reporting Live from Chicago:The Chicago area fared only slightly better, with single-family sales down 4.8 percent from January 2005 and condo sales down 2.8 percent. ....
They jumped by 11.5 percent in the Chicago area, to a median $234,000 for single-family homes. Chicago condos went up 8.2 percent, to a $211,000 median
In the Chicago area the Multiple Listing Service of Northern Illinois said it could not track year-over-year inventories, but reported that 22,560 homes and condos went up for sale in January, up from 18,337 new listings a year earlier.
Deerfield real estate agent Honore Frumentino described the current market as "strange."
"On the very high end, we have two and three and four years of inventory on the North Shore," Frumentino said. "The break point is $3 million. It's really tough over $3 million. That's where the air gets really thin on the North Shore.
"I think it's the same in the western suburbs, where a lot of stuff in the $1 million to $3 million range is just sitting."
This house in Skokie still has not sold. See the original post titled Falling Sign, Falling Price.
The H Street Commercial Corridor located along H Street NE between 2nd Street and 15th Street is a hot commercial corridor that is being redeveloped. There is a critical mass of commercial establishments that are geared towards the yuppie crowd. Large office and condo buildings will soon be built here. In the surrounding neighborhoods, lovely rowhouses are being rehabbed and renovated. The area is getting wealthier as the yuppies move in. The newly reopened H Street Playhouse is shown in the picture. (credit: Old City Neighborhood Capitol Hill Association). Some boosters are claiming it will be the next 14th Street, U Street or even M Street (in Georgetown).
Here is a condo unit for sale in the Mica Condominiums which is located in downtown Silver Spring, MD . The original structure was built 1968 as an apartment building. Now its being converted to condos.For nearly 100 years, Realtors® have subscribed to one of the oldest codes of ethics for trade groups in the country. Today, with the premiere of advertising spots entitled, ‚“Someone You Can Trust,” the National Association of Realtors® explains how its Realtor members‚’ adherence to that code serves and protects the public.
On the Net:
National Association of Realtors: http://www.realtor.org/
National Association of Home Builders: http://www.nahb.org/
This newly constructed home is available for sale in a long neglected neighborhood in Northeast Washington, DC. Along 56th Place just north of East Capitol Street. The house is very large compared to the nearby homes. Due to the housing bubble many more houses like this have gone up in these long neglected neighborhoods.
The European Central Bank (ECB) announced an interest rates hike by 25 basis points from 2.25% to 2.50%, a move largely predicted by markets.Additionally, "The Bank of Japan is also expected, as soon as this month, to end years of an ultra-loose monetary policy of pumping cash into its banks and pinning market interest rates at zero (Reuters, March 2nd, 2006)."
It has been the second augment of that size in four months and it means that the deposit rate edged up to 1.50% from 1.25%, and the marginal lending rate to 3.50%, versus 3.25% previously. (FXStreet.com; March 2nd, 2006)
Average U.S. home prices increased 12.95 percent from the fourth quarter of 2004 through the fourth quarter of 2005. Appreciation for the most recent quarter was 2.86 percent, or an annualized rate of 11.4 percent. The increase during 2005 is similar to the revised increase of 12.55 percent for the year ended with the third quarter of 2005, showing no evidence of a slowdown.
HOUSE PRICE APPRECIATION CONTINUES AT ROBUST PACE
OFHEO HousePrice Index Shows Annual Rise of Nearly 13 Percent; Unprecedented Increases in 26 Metropolitan Areas
WASHINGTON, D.C. " Average U.S. home prices increased 12.95 percent from the fourth quarter of 2004 through the fourth quarter of 2005. Appreciation for the most recent quarter was 2.86 percent, or an annualized rate of 11.4 percent. The increase during 2005 is similar to the revised increase of 12.55 percent for the year ended with the third quarter of 2005, showing no evidence of a slowdown. The figures were released today by OFHEO Acting Director Stephen A. Blumenthal, as part of the House Price Index (HPI), a quarterly report analyzing housing price appreciation trends.
"Despite recent indications that a slowdown may be forthcoming, house price appreciation during 2005 continued to hover at near-record levels,"said OFHEO Chief Economist Patrick Lawler.
House prices continued to grow considerably faster over the past year than did prices of non-housing goods and services reflected in the Consumer Price Index. House prices rose 12.95 percent, while prices of other goods and services rose only 4.3 percent.
"While deceleration continues in some areas, appreciation generally is still extremely strong," said Lawler. "Mortgage rates climbed significantly during the second half of last year, but the effect of that increase on price appreciation so far appears to be limited."
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