Experts: This Will Level Off, Honest!
This long USA Today piece wrestles with the many issues of the housing bubble."For a time late last year, it looked as though the long-predicted slowdown was arriving. The NAR expects existing-home sales to decline about 1.2 percent this year and new-home sales to slip 2.5 percent. Prices are expected to rise 7 percent."
"'The market here is just absolutely nuts,' says Pamela Harness, realtor in Chandler, Ariz. 'I get investors calling; they want to buy a home. I tell them they're a day late and a dollar short at this point.'"
"'Home buyers appear to be irrationally exuberant,' Jan Hatzius, economist at Goldman Sachs, said in an April report to clients." Not the most original call, but welcome.
"In an April USA TODAY poll of 55 top economists, three-fourths called housing overheated, though they differed on whether they expect a gradual cool-down or a sharp drop in sales and prices." This blog has pointed out that this is what experts have said for a while, yet the bubble grows on. "Nationally, home prices have jumped an average 50 percent in the past five years."
The number of speculators shocked the NAR when first announced. Now they use it as a reason to explain the mania away! "Further, affluent baby boomers, are buying second houses..(says) the National Association of Realtors."
"Mass migration from pricey areas to affordable ones, dubbed the 'salmon run',creates its own problems. 'Like the plague in the Middle Ages, real-estate-price inflation is being spread by the people who are fleeing it,' Eric Wolfe wrote recently."
7 Comments:
Level off or bust (i.e., sustained price drops of more than 20%)? That seems to be the only question. It all depends on how many greater fools are still standing in line and willing to pass the hot potato.
What I find so unusual is the upticks in the number of foreclosures. In what is clearly a good housing market for sellers, why would those facing foreclosure actually be dragged through that process instead of selling at what would likely be a profit?
Methinks there's some sort of financial denial going on in those situations.
Denial only lasts a while. In the end, "reality always asserts itself over wishful thinking".
There is no question that we are at the turning point or we have already past such point.
Soft landing is highly improbable. What I am shocked is that my friends still think that RE will still go up from here. I think they better seek the ends of the earth because the world may be flat.
i absolutely love when industry officials say that sales will drop but prices will continue to rise... i always get a big laugh out of that one...
gimme a break fellas... you all must be renters. get a RE life! I have one and i am typing from my villa in Kona that i bought with RE deals.
--DO NOT FEED THE TROLLS--
--DO NOT FEED THE TROLLS--
--DO NOT FEED THE TROLLS--
Hey Close Talker!
Most of us investors sold our RE to lock in our profits.
How negative is your cash flow? Will you be underwater on all or just some of your properties when the markets dip?
By the way, Kona was only impressive in the 1980s (much like your ideas!) and is no longer "the place to be."
I look forward to buying your condos at the foreclosure auctions!
Here in San Diego, the sales numbers for April show that yoy sales numbers HAVE dropped by half, and the median price has risen to 500K. Days on the market have doubled since 4/04, I think the exact number is 49 days.
Should be an interesting summer.
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